Romania is going through a delicate moment, with high inflation, a declining GDP, consumption under pressure, and political instability, according to Flavius Valentin Jakubowicz, president of the Supervisory and Advisory Board of IFA Romania, stating that we are not in a crisis without solutions, but at a point where economic decisions must be serious.
„Data released for April confirm a deterioration in macroeconomic stability: Romania is simultaneously facing double-digit inflation and an economic contraction. The annual inflation rate rose to 10.711% in April 2026, from 9.871% in March, while prices increased by 0.841% compared to the previous month. Since the beginning of the year, cumulative inflation has already reached 3.11% (year-to-date), and the average over the last 12 months is 9.1%, indicating that the pressure on purchasing power is not temporary but persistent. The central issue is not just the level of inflation, but the combination of high inflation, suppressed consumption, and declining GDP. According to NIS data, Romania’s GDP fell in the first quarter of 2026 by 0.21% quarter-on-quarter compared to the previous quarter, and compared to the same quarter of 2025, it declined by 1.51% on the seasonally adjusted series and by 1.71% on the gross series. This indicates that the economy is entering a phase of adjustment following a period in which growth was excessively fueled by consumption, deficits, and public spending”declared Flavius Valentin Jakubowicz to Agerpres.
He pointed out that the structure of inflation is very important, as it is not just a matter of rising food prices, but of sharp increases in components that affect nearly all costs in the economy: electricity +54.181% (quarter-on-quarter), rents +43.781% (quarter-on-quarter), diesel +32.681% (quarter-on-quarter), gasoline +22.421% (quarter-on-quarter), coffee +21.761% (quarter-on-quarter).
Services rose by 13.041% quarter-on-quarter, non-food goods by 12.021% quarter-on-quarter, and food by 7.391% quarter-on-quarter. These figures point to pressures on production costs, transportation, rent, utilities, and services, which will be passed on to companies’ final prices.
„At the same time, we must be very careful with the interpretation. Part of the current inflation comes from supply shocks: energy, fuels, regional tensions, base effects, and effects of previous tax changes. The NBR has already signaled that inflation will remain above previously anticipated levels in the period March-June 2026, mainly due to the rising cost of fuels and effects in the energy segment. However, we cannot attribute everything solely to external factors. Romania enters this period with significant internal vulnerabilities: a high budget deficit, high financing costs, administrative rigidities, and an economy that is too dependent on consumption and too little on productive investments, exports, infrastructure, and added value, and last but not least, the government crisis. Therefore, today's inflation is also the result of imbalances accumulated over time, not just a momentary external crisis, amplified by the fall of the Bolojan Government.”explained Flavius Valentin Jakubowicz.
He also noted that, at the European level, the difference is significant. Eurostat projected annual inflation of 3.1% for the eurozone in April 2026, up from 2.61% in March, with energy being the main driver of inflation. Even though Europe is also facing energy shocks, Romania remains well above the European average, which affects competitiveness, purchasing power, and the predictability of the business environment.
„For the business environment, the message is clear: a period is coming when liquidity, cost control, contract renegotiation, conservative budgeting, and margin analysis become essential. Companies can no longer operate on assumptions of automatic consumption growth. SMEs in particular must review their budgets, test their cash-flow scenarios, and be cautious with investments financed solely by debt. For economic policy, the solution cannot be populist; we cannot combat inflation with measures that artificially stimulate consumption or with fiscal interventions lacking budgetary coverage. Credible fiscal consolidation, reduction of budgetary waste, prioritization of public investments with a multiplier effect, absorption of European funds, and legislative predictability are needed. Economic adjustment is necessary, but it must be done intelligently so as not to destroy private capital and the capacity of companies to invest. In conclusion, Romania is going through a delicate moment, with high inflation, declining GDP, consumption under pressure, and political instability. We are not in a crisis without solutions, but we are at a point where economic decisions must be serious, coherent, and data-driven, and policymakers must see Romania's interest. Stability is not achieved through declarations, but through fiscal discipline, productive investments, and rebuilding confidence in the economy.”Flavius Valentin Jakubowicz also said.
