SKN | ING Sees Romania’s Economy Stabilizing, But Credit Rating Risks Continue to Shadow Recovery

Key Takeaways:

• ING expects Romania’s economy to recover to 2.3% growth in 2027 after forecasting a 0.5% contraction in 2026, supported by infrastructure investment and easing inflation.
• Fiscal consolidation is progressing broadly in line with government plans, while Romania still has reasonable prospects of absorbing most of its remaining EU Recovery and Resilience Facility (RRF) funding.
• Political uncertainty, reform execution risks, and the possibility of a sovereign credit rating downgrade remain significant concerns despite improving macroeconomic conditions.

ING believes Romania is showing increasingly visible signs of macroeconomic rebalancing, with fiscal discipline improving and the foundations for economic recovery beginning to emerge. However, the international bank cautions that political uncertainty and the consistent execution of reforms remain critical factors that could determine whether Romania preserves investor confidence and avoids a sovereign credit rating downgrade.

Why Romania’s Fiscal Adjustment Is Beginning to Gain Credibility

According to ING’s latest research, Romania’s fiscal consolidation efforts represent a meaningful step toward restoring macroeconomic stability after a difficult period marked by slowing growth and elevated inflation.

The bank expects fiscal measures implemented during 2026 to remain broadly aligned with official government plans. While this progress is encouraging, ING emphasizes that current improvements should be viewed as the beginning of a longer adjustment process rather than a completed turnaround.

For institutional investors and international lenders, sustained policy execution will be more important than short-term fiscal improvements as markets continue evaluating Romania’s long-term financial credibility.

Political Stability Remains the Largest Uncertainty

One of ING’s principal concerns is the prolonged period of political uncertainty following several months under an interim government.

The research notes that the extended transition raises questions regarding policy continuity, ownership of structural reforms, and the government’s ability to deliver politically sensitive commitments required under European Union funding programs.

Although the current political environment does not invalidate recent fiscal progress, it significantly increases the importance of execution, particularly as Romania approaches key Recovery and Resilience Facility milestones.

Credit rating agencies continue monitoring fiscal discipline, political stability, and economic growth closely, leaving Romania exposed to potential rating pressure should reform momentum weaken.

Economic Recovery Expected to Strengthen During 2027

ING projects Romania’s economy will contract by approximately 0.5% during 2026, reflecting subdued domestic demand, restrictive fiscal policy, elevated inflation, and weak consumer and business confidence.

However, the bank expects conditions to improve gradually during 2027 as inflation moderates and investment activity strengthens.

Economic growth is forecast to rebound to 2.3% next year, supported primarily by infrastructure development, improving investor confidence, and stronger private consumption as purchasing power recovers.

Infrastructure Investment Remains a Long-Term Growth Engine

Despite the scheduled conclusion of the European Union’s Recovery and Resilience Facility in August 2026, ING expects infrastructure investment to remain an important driver of Romanian economic activity.

Many large-scale projects in healthcare, transportation, and other capital-intensive sectors are expected to transition toward financing through EU Cohesion Funds, helping maintain investment momentum beyond the RRF program.

In addition, Romania is expected to receive approximately €16.7 billion under the European SAFE framework, including around €2.5 billion in pre-financing once formal procedures are completed.

These funding sources could continue supporting foreign direct investment while strengthening the country’s productive capacity over the medium term.

Inflation and Confidence Continue to Limit Near-Term Growth

Although macroeconomic conditions are gradually improving, ING does not expect a significant acceleration in economic activity during the remainder of 2026.

Inflation remains above comfortable levels, fiscal policy continues to restrain domestic demand, and both consumers and businesses remain cautious amid ongoing political uncertainty.

As a result, the bank expects economic activity to remain relatively subdued until broader confidence improves and investment projects translate into stronger domestic growth.

Why Credit Ratings Still Matter for International Investors

For international investors, sovereign credit ratings remain one of the most important variables influencing Romania’s financing costs and investment attractiveness.

ING believes recent fiscal improvements strengthen Romania’s position, but emphasizes that sustained reform implementation will ultimately determine whether rating agencies maintain confidence in the country’s fiscal trajectory.

A successful combination of disciplined public finances, continued European funding absorption, and political stability would provide stronger support for long-term economic expansion while reducing borrowing costs across both the public and private sectors.

Closing Insights

Romania appears to be moving gradually toward macroeconomic stabilization, with improving fiscal discipline and significant infrastructure investment creating a foundation for renewed growth. Nevertheless, the country’s outlook remains highly dependent on political stability and the government’s ability to consistently execute reforms. For investors, Romania’s next phase will be defined less by ambitious policy announcements and more by whether those commitments are successfully delivered, preserving market confidence and supporting sustainable economic recovery.

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