Economic activity remained modest at the start of 2026. The economy contracted by 1.1% year-over-year in the first quarter of 2026. On a quarterly basis, GDP stabilized (0.0% quarter-over-quarter, seasonally adjusted) following a sharp decline in the fourth quarter.
Inflationary pressures intensified, with the CPI rising to 10.71% year-over-year in April, up from March. Monthly inflation stood at 0.84% month-over-month, indicating persistent underlying pressures.
The budget deficit stood at -1.17% of GDP in April (on a cash basis), an improvement compared to last year (-2.92% of GDP). Economic sentiment showed tentative signs of improvement, edging up slightly, although it remained below its long-term average.
The EUR/RON exchange rate depreciated in May (to an average of 5.23), indicating increased foreign exchange pressures. The NBR kept the policy rate at 6.50%, while the 3-month ROBOR edged slightly lower in May, to an average of 5.85%.
The external position is showing early signs of improvement. The trade deficit remains high, at 10.81 billion euros in the first four months, but has narrowed compared to the previous year (-7.0% YoY).
