Economic activity remained modest at the start of 2026. The economy contracted by -1.1% year-over-year in Q1 2026, while on a quarterly basis, GDP stabilized (0.0% quarter-over-quarter, seasonally adjusted), following the sharp decline in Q4.
Inflationary pressures continued to intensify. The CPI rose further to 10.85% year-over-year in May, up from April, while monthly inflation stood at 0.58% month-over-month, indicating persistent underlying pressures despite some moderation in the pace of increase.
The budget deficit reached -1.75% of GDP in May (on a cash basis), nearly half of last year’s figure (-3.35%). At the same time, economic sentiment weakened more noticeably, with the confidence indicator falling to 83.5 in June—well below its long-term average—signaling deteriorating expectations.
The EUR/RON exchange rate continued to depreciate slightly, reaching an average of 5.24 in June, up from 5.23 in May, indicating ongoing foreign exchange pressures. The NBR kept the policy rate at 6.50%, while the 3-month ROBOR edged down slightly to 5.84% in June, confirming relatively stable liquidity conditions.
The external position is showing early signs of adjustment. 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).
