The International Monetary Fund (IMF) has revised downwards its forecast for the Romanian economy this year, projecting a contraction of 0.5%, compared with growth of 0.7% forecast in April and an expansion of 1.4% in October last year, according to the latest ‘World Economic Outlook' (WEO) report published by the international financial institution on Tuesday.

The IMF has also slightly lowered its forecast for Romania's GDP growth in 2027, to 2.2% from the 2.5% projected in the spring.

According to the international financial institution, Romania and Ireland are the only countries in both advanced and emerging Europe expected to record a contraction in gross domestic product this year, of 0.5% and 1% respectively. Overall, Europe is forecast to record economic growth of 1.4% in 2026 and 1.7% in 2027.

The IMF is also more pessimistic about Romania's progress in reducing its current account deficit, which, according to its latest estimates, will narrow to just 7% of GDP this year, compared with the 6.8% of GDP forecast in the spring. The situation is expected to be similar next year, when Romania's current account deficit is projected to narrow to 6.7% of GDP, a more modest improvement than the 6.2% of GDP forecast in April.

The IMF has also significantly revised its forecasts for consumer price inflation in Romania, which is expected to average 8.2% in 2026 and 4.1% in 2027. By comparison, in April the Fund forecast average annual inflation of 7.8% in 2026 and 3.9% in 2027.

As regards Romania's unemployment rate, the IMF expects it to rise to 6.5% in 2026, from 6.1% in 2025, before edging down to 5.9% in 2027. By comparison, in April the Fund had forecast a slight decline in the unemployment rate to 6% in 2026, followed by a further decrease to 5.9% in 2027.

The forecasts were published ahead of the autumn meetings of the International Monetary Fund (IMF) and the World Bank (WB), which are taking place this week in Bangkok, Thailand.

Last week, the World Bank published its own forecasts, according to which the Romanian economy is expected to contract by 0.5% this year due to fiscal consolidation and higher energy costs. A recovery in real incomes and slowing inflation should help growth rebound to around 1.9% in 2027-2028, following the decline in 2026. AGERPRES (RO - writing by: Constantin Balaban; EN - writing by: Adina Panaitescu)

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