Romania's economy loses the engine of consumption, but hopes to start the engine of investments
Romania's economy begins the year 2026 with a cooling signal from the area that fueled economic growth in the last decade: consumption. Data published by the National Institute of Statistics show that retail sales fell in January 2026 by 6.5% compared to the same month last yearin seasonally adjusted terms (from which statisticians remove seasonal effects – such as public holidays, vacations, working days, etc. – to see the economic trend more clearly).
It is one of the clearest signs that the engine of consumption — which has driven the economy in recent years — is starting to slow down.
In raw terms, without statistical adjustments, the decline is even greater: -9.1% compared to January 2025.
Why did the suit go down?
From the summer of 2025 retail went into the red: sales fell by 4–5% annually in the autumn after the tax package (VAT increase from 19% to 21% and electricity price liberalization).
Inflation rose again to close to 10% at the end of 2025, and in the last 3 months of 2025 the average real wage fell by about 5% from the previous year, two quarters in a row with falling purchasing power.
Budgetary consolidation measures (higher VAT, spending cuts, curbing wage increases in the state) reduce disposable incomes and increase household prudence.
Official forecasts show economic growth close to stagnating in 2025 (0.3–0.6% real), with private consumption barely growing in real terms, so it is unlikely to pull the economy up like in 2024.
In the past two years, the population has been hit by a combination of factors:
- high inflation
- high interest rates on loans
- stagnation of real incomes in some sectors.
This combination erodes purchasing power and reduces appetite for spending.
For Romania's economy, this is important because household consumption represents over 60% of GDP.
Now, this model is starting to show signs of fatigue.
When and how he might recover
The NBR and analysts see a moderation in inflation after the summer of 2026, when the basic effects of VAT and energy fade; this would allow real wages to gradually recover.
Retail models point to sales returning from declines of 3–4% now to modest increases (2–3% annually) only after 2026, unless further fiscal shocks occur. In addition, the new economic reality (oil shock, war in Iran) is probably delaying the return of consumer appetite.
Decreases in all segments
The decline is visible in all major categories of population expenditure:
- non-food products: -7.9%
- fuels: -4.8%
- food, drink and tobacco: -3%
In other words, Romanians buy less of almost everything.
In the short term, the decline is even steeper if you compare January to December 2025 — but that comparison is less relevant because December is traditionally a high-consumption month.
However, even after statistical adjustments, sales were down 3.7% from the previous montha sign that the slowdown in consumption is real. The signal appears at a sensitive moment for the economy
The consumption data comes at a time when Romania's economy is already slowing down.
In 2025, the economy grew by just 0.7%one of the weakest beats in recent years.
At the same time, Romania faces two major imbalances:
- high budget deficit
- large current account deficitfueled by imports.
Lower consumption can partially help reduce the trade deficit, but it comes at a cost: slower economic growth.
A change of economic model?
For many economists, the slowdown in consumption is part of a broader transition in the economy.
Romania is gradually trying to move from a model based on consumption + deficitto one based on investments + European funds + domestic production.
European funds from PNRR and cohesion programs should become the main engine of economic growth in the coming years.
The question is whether these investments can offset the slowdown in consumption quickly enough.
What's next
For now, January's data is just the start of the year — and consumption may rebound if inflation continues to fall and real incomes start to rise again.
But the message of the statistics is clear: mthe engine of consumption, which pushed Romania's economy for a decade, no longer works at the speed of the past.
