Governor of the National Bank of Romania (BNR) Mugur Isarescu argues that Romania’s economy will most likely not register two consecutive quarters of negative growth, which would mean entering recession, but even under such a scenario, the full-year performance will be positive, of approximately 1 percent.
„I can tell you now based on hope and my own experience that we will not have two quarters of negative growth, which would define a recession, but anyway, even in this version, let us say that in quarter IV compared with quarter III, we will have something with a minus, for the whole year economic growth is positive, somewhere around 1 percent. It is now around 1.5 percent, according to the flash estimate,” Mugur Isarescu said when asked by journalists how he views the decline recorded in quarter III by the economy.
He mentioned that the National Bank of Romania is doing everything possible to bring inflation down and avoid deepening the risk of recession.
„It may be a warning signal in the sense that what was expected is coming true. When you take such fiscal correction measures domestic demand, consumer demand, goes down, everyone talks about this, and of course economic activity declines. But what we are trying to do, together with the Government – because this is a joint programme, the correction is fiscal, but we also adjust our monetary policies according to this correction, as I have told you, and it is also a correction programme supported by the European Union – is to avoid recession. It is not easy, in general, when you try to exit a procyclical policy and this is what we are doing now, trying to exit a procyclical policy of the past two to three years when demand was continuously stimulated and in the end, we ended up stimulating production abroad, which meant widening the deficit. At first you are still procyclical, you can turn yourself upside down to try various combinations. What matters is that this procyclicality is not amplified…and this is why we are trying not to intensify the economy’s entry into recession. We are making this effort to push inflation down while keeping the current monetary policy rate. Which is not easy for us either,” Mugur Isarescu said.
The Gross Domestic Product fell by 0.2 percent in real terms in quarter III of this year compared with the previous quarter, after an advance of 1 percent in Q2 versus Q1, according to the flash estimates published on Friday by the National Institute of Statistics (INS). Compared with the same quarter of 2024, the GDP recorded growth of 1.6 percent on gross series and 1.4 percent on the seasonally adjusted series. In the period January to September 2025, the economy grew by 0.8 percent compared with the same period of last on gross series and by 1.4 percent on seasonally adjusted series. AGERPRES
