Romania's Q3 GDP rises 2.1%, but finance minister warns of junk rating risk

Third-quarter rebound

Finance Minister Alexandru Nazare pointed to National Institute of Statistics (INS) figures published on 13 November showing gross domestic product up 2.1% in the third quarter from the previous quarter, on a seasonally adjusted basis. On the gross series the year-on-year change was 0.1%, while the seasonally adjusted annual figure stood at 0.3%. Nazare called this the strongest quarterly pace since early 2022 and set it against Eurostat's preliminary estimates of 0.5% growth in the European Union and 0.4% in the euro area. The economy had posted three quarters of decline or stagnation before that. He cautioned that industry and consumption have not yet recovered, and that on a gross basis output for the first nine months remains 0.3% below the 2025 level.

In a Facebook post, he described the result as a positive signal to be analysed with caution:

“This is a positive signal, which we are analysing with caution.”

Public investment and the deficit

Nazare linked part of the growth to public investment and to faster projects financed from EU funds, particularly the National Recovery and Resilience Plan (PNRR). He cited a 40.5% rise in construction works in August compared with the same month of 2025, following double-digit gains in most months of this year. Public investment financed in the first nine months of 2026 came to almost 108 billion lei, more than 25 billion lei above the same period of 2025. Public investment reached 2.33% of GDP in the third quarter, against 1.67% a year earlier, while the nine-month budget deficit fell from 5.31% to 3.81% of GDP. The minister argued that the deficit was reduced without cutting investment.

“We did not reduce the deficit by cutting investment, but by financing more investment and spending more disciplined elsewhere.”

Q3 20251.67

Q3 20262.33

Q3 2025

1.67 % of GDP

Q3 2026

2.33 % of GDP

Data from the article text

First nine months 20255.31

First nine months 20263.81

First nine months 2025

5.31 % of GDP

First nine months 2026

3.81 % of GDP

Data from the article text

The 2027 budget and PNRR cash

The minister said the 2027 budget depends on how 2026 closes. The scenario behind the 6.2% of GDP cash deficit target for 2026 counts on collecting by 31 December the sums tied to PNRR payment requests no. 5 and 6, which are under evaluation and under discussion with the European Commission. Ministries had until 13 November to finish and send their spending limit proposals to the Finance Ministry through the eBuget NG application, and some information and proposals were still missing. Nazare described the 2027 budget as the most important in recent years, following what he called the largest budget adjustment in the European Union, carried out within a year and a half. He said every ministry must justify its spending, set priorities and identify where resources can be used more efficiently.

“The 2027 budget must strengthen confidence in Romania. Credibility starts with how we base our spending.”

Rating outlook and junk risk

Speaking on Antena 3 CNN on the evening of 12 November, Nazare said the risks flagged by President Nicușor Dan regarding the rating agencies were correct. He said the outlook on Romania had turned negative from stable around the end of 2024 and that the country sits on the last investment-grade rating. He did not believe Romania was in a position to return under international monitoring or an IMF agreement, though that depends on how the coming reviews are handled. Fitch reviews Romania in January 2027, Moody's in February and Standard & Poor's in March. Losing investment-grade status, he warned, would hit inflation, the exchange rate and jobs, with the effects falling on the vulnerable population. Asked whether Romania risks junk status at the next reviews, he rejected that scenario and said it is up to the government to avoid it.

“We have had very many critical moments, including this summer, and we are still walking a tightrope.”

Growth forecast for 2027

Nazare said the ministry expects economic growth in 2027 of 1.7 to 1.8%, while others put it at 2% or somewhat above. He said there is a consensus that Romania will grow next year, and that growth at that level, combined with sound management of the public budget, would let the economy recover. He noted that final third-quarter figures will only be confirmed at the end of the year. He hoped the fourth quarter, which carries the largest weight in the year, would do better than the 0.4% contraction in the forecast he cited. The ministry also expects 2026 to close on a positive note.