What will the economy be like in 2026 / “Fiscal consolidation cannot rest only on the shoulders of those who produce”, says the Association of Business People

Romania's economy will not have a choice between good and bad, in 2026, but between a certain evil and a difficult road, the only one that can maintain stability and avoid a crisis of confidence, believes the Romanian Businessmen's Association (AOAR), according to a statement sent on Monday.

According to the association, “the big question is not whether we will pay the price of the adjustment, but how we divide this bill between the state, the private sector and society. How do we make sure that in 2026 the burden is not transferred again to the population (primarily through inflation) and to the business environment?”

Brutal but incomplete correction

AOAR shows that 2025 was the year the budget correction was made simple and brutal:

• more taxes,
• more pressure on the private environment,
• rules changed on the fly.

State reform was again pushed into the future. Waste remained largely tolerated and administrative inefficiency almost intact. This is not fiscal discipline, but only burden transfer from the state to those who produce value, AOAR also points out.

The budget deficit remained the largest in the EU: 9.3% of GDP in 2024, with a target of 8.4% in 2025, after successive packages of tax increases.

Without adjustments, the deficit would have remained close to 9% in 2025 as well, which would have taken the public debt on an obviously unsustainable trajectory.

The 2025-2026 consolidation package included increasing VAT by 2 percentage points, higher excise duties and freezing public sector wages and pensions until 2026.

“In short, we taxed those who produce more, but we avoided seriously reforming the way the state spends”, states AOAR.

2026: Modest economic growth, supported rather from the outside

International forecasts for 2026 indicate modest but positive economic growth:

• European Commission: +1.1% real GDP growth in 2026 (after only +0.7% in 2025), in a context of fiscal consolidation that puts pressure on public and private consumption.
• IMF: +1.4% in 2026, with investments financed from European programs (NextGenerationEU/RRP) partially offsetting the slowdown in consumption.
• OECD: confirms the same picture – modest growth in 2025-2026, based on investment and exports, not domestic consumption.

At the same time, the budget deficit is estimated to decrease to only 6.2-6.3% of GDP in 2026 – still well above the 3% threshold and above the targets agreed with European partners.

“The message of the figures is clear: in 2026 we will not be in recession, but we will not have robust growth either. The economy is moving forward, but with the handbrake pulled by budget imbalances and the increased fiscal burden,” states AOAR.

In the opinion of the Association, if we do not adjust the budget, we enter a fiscal crisis. If we adjust it only through taxes, the social affordability and competitiveness of firms become unknown.

AOAR shows that the real choice is not to adjust or not to adjust, but between:

• a sure evil – the perpetuation of a high deficit, doubled by successive increases in taxes on labor and capital, which erode the productive base;
• a hard road – reforming the state, reducing waste and re-aligning spending, which also involves political costs and courage.

Tax collection is only one part of a larger balancing process between:

• the real budgetary needs of the state (defense, infrastructure, education, health);
• the real economic possibilities of society, especially of the private environment.

In 2025, the adjustment was made almost exclusively at the expense of those who produce: the minimum turnover tax (IMCA), increased labor and capital taxes, fiscal unpredictability. Business organizations have already signaled the negative impact of IMCA on investments and competitiveness and have insisted on the elimination of this tax, states the Business People's Association.

“The key question for 2026 is uncomfortable but essential: how long can an economy grow where only those who produce are 'adjusted' and those who spend remain largely protected?”, the statement said

Three scenarios for 2026

AOAR sees three possible scenarios for 2026

“Shallow equilibrium” scenario (highest probability)

• GDP: growth around 1-1.5%;
• Deficit: slow descent towards 6-6.5% of GDP;
• Inflation: still above the comfortable level for business, but down from 2024-2025;
• Investments: impetus coming mainly from European funds and public projects already engaged;
• The private sector: investment caution, focus on efficiency and restructuring, not on expansion.

This scenario assumes the absence of a new self-inflicted political crisis and the maintenance of a minimally functional dialogue with the business environment. Any major political slippage (the fall of the Government, prolonged parliamentary deadlocks) could push the economy below these projections.

The positive scenario: “the hard but fair road”

• The government is finally starting to adjust spending:
• the restructuring of the budgetary apparatus,
• real audit of spending programs,
• prioritizing investments with economic impact.

There is a clear timetable for tax simplification, including the elimination or reform of the minimum turnover tax.

Tax legislation is becoming more predictable, with changes announced and discussed ahead of time.

The exchange rate increases in small steps depending on the evolution of the trade balance.

The negative scenario: “fiscal fatigue”, if the adjustment continues in the same logic as in 2025:

• economic growth below 1% or real stagnation;
• the migration of a larger part of the economy into the gray or black zone;
• postponement of investments and relocations of activity to more predictable jurisdictions;
• straining the relationship with European partners due to the delay in correcting the deficit.

From the perspective of the Association of Romanian Businessmen, 2026 will be a test year of political and administrative maturity. “Fiscal consolidation cannot rest only on the shoulders of those who produce. The adjustment must include the state itself: reducing waste, restructuring the public apparatus, prioritizing investments”, stated AOAR.