Business consultant: Romania is in the antechamber of recession

  Romania is in the antechamber of recession, with the risk that its economy will decline in the third or fourth quarter, especially amid an increase in taxes, a significant drop in sales and record inflation at European level, says business consultant Adrian Negrescu."We are currently in the antechamber of recession. It is a moment of calm, of economic stagnation that unfortunately presages only bad news for the time ahead, amid an increase in taxes, against the background of record inflation at European level. All these elements will unfortunately probably lead the economy into recession in the third quarter or fourth quarter. We hope that it will be only a mild recession, with a small decrease in the gross domestic product and that we will not find ourselves in a long-term recession, of a year, two, maybe even three, given that the economic environment is increasingly rarefied, and the effect of the increase in taxes is felt more and more strongly. (...) There are already branches where we can talk about recession, such as real estate, construction, the manufacturing sector, but also trade, which are suffering strongly amid the drop in sales in volume, in most areas, from the food sector to the clothing, footwear and hygiene products," Negrescu said on Thursday.According to him, the increase in taxes, the significant drop in sales, the record inflation at European level, the accentuation of the financial blockage and the phenomenon of disintermediation are among the most important causes that risk leading the economy into recession."The good news is that we are still afloat and this shows that the economy, despite the challenges generated by the tax increases from January 1, by inflation, manages to maintain itself at an acceptable level, proof of the fact that the vast majority of Romanian companies have restructured their business. They have adapted their products, services, expenses to the new economic reality. This economic growth is a weak one, it is a snapshot of the moment and it must raise an alarm signal in all environments, both in the public sector, where the question arises whether the revenues from taxes in the second part of the year will really rise to the level of expectations, and on the other hand, in the private sector, to sound new alarms over the solidity of economic chains. We already have a lot of economic chains, especially in sectors related to trade, real estate, distribution of goods, where there are already problems," added the consultant.According to him, there are over 100,000 companies that risk going into insolvency moving forward amid the challenges generated by the drop in sales."The financial blockage has become very marked, meaning that companies no longer make payments to each other quickly. Most companies already pay every 2-3 months, which is a big problem given the inflationary context. These are challenges that we hope the business community will overcome well, especially since this whole situation is only a momentary photo. It is likely that from the second part of the year, i.e. the third and fourth quarters, we will see the economy in decline, we will already see the first signs of a recession, which will probably become more pronounced as we approach the end of the year," said Negrescu.Romania's Gross Domestic Product (GDP) increased by 0.3% in the second quarter of 2025, year-on-year unadjusted and by 2.1% seasonally adjusted , and in H1 2025 it increased by 0.3% as against the similar period of 2024, unadjusted , and by 1.4% seasonally adjusted, according to the signal estimate of the National Institute of Statistics (INS).According to the Minister of Finance, Alexandru Nazare, Romania's economic growth is decelerating, and investments have fallen by 30% in the first five months, so "we must be prepared" at any time for a recession.The central bank recently reported that the new statistical data reconfirm economic stagnation in Q1 2025 , after an increase of 0.5% in the previous three months, as well as the decrease of its annual growth to 0.3%, from 0.5% in Q4 2024.The International Monetary Fund (IMF) has worsened its growth estimates of the Romanian economy this year, from 3.3% as previously forecast, to 1.6%, according to the "World Economic Outlook" (WEO) report, published in April 2025 by the international financial institution.The European Commission has reduced to 1.4%, from 2.5% previously, its growth estimates of the Romanian economy this year, according to economic forecasts published in May 2025.According to the World Bank's June estimates, the Romanian economy will advance 1.3% this year, as against 2.1% forecast in January 2025.