I don't know if there is anyone who hasn't heard that Romania has entered a technical recession! – two consecutive quarters of economic decline, respectively Q4 2025 compared to Q3 (minus 0.9%) and Q3 compared to Q2 (minus 0.2%). It doesn't even matter that for the whole year the economic growth was 0.6%, even in the conditions where there were tax increases, inflation doubled, and wage growth entered negative territory. In 2024, when Prime Minister Ciolacu threw the largest amount of money into the economy after '89, starting with wage increases, economic growth was only 0.9%. For statistics, when reviewing the data, and in 2024, during Ciolacu's time, we were in a technical recession. The bad economic result in Q4/2025 represented a good opportunity for the PSD, the main governing party, to snap the neck of Prime Minister Ilie Bolojan, accusing him of having plunged the economy, Romania, into crisis with the measures he took, with his attitude and rhetoric. And the PSD announced once again that it no longer supports any measure of restructuring, budget reform, reduction of the public administration, as if any had been taken before. All this public rhetoric from everyone gives the impression that the country is in a major crisis, that everything is collapsing, which has induced a state of instability in the economy, resulting in a reduction in consumer spending and a drop in consumption more than would have been the case had there been no nominal wage cuts and no major layoffs. The problem is not that we entered a technical recession, because that was for the past anyway, but that this trend of reducing expenses, of consumption, continued in January, continues in February (Dan Ostahie, the owner of Altex, one of the biggest players in the electro-IT market, even says that a crisis is being registered considering how much sales have fallen) and I don't know if the situation will change in March, even with the increase in spending on flowers, chocolate, cakes, meals at the restaurant and, of course, martisores and gifts. If the first three months of the consumption year are lost, we will have an increase in investments for nothing, as Prime Minister Bolojan says everywhere that the paradigm is changing, that is, the economy is moving from consumption to investments. The investments, if they will be realized, are not realized overnight, they do not have an immediate effect, they are seen in the statistics much later. We need now, not a year from now, some short-term measures to revive consumption, from the consumption of food, non-food products, durable goods, cars, to apartment sales. Almost everyone is on money, almost the entire economy is on money and looking at it as it sits in bank deposits or through drawers. If the money stays, we don't have any kind of economic growth, and from recession, be it technical, it is only one step to an economic crisis. Until the economic recovery package comes into force, which is very heavy from a legislative perspective, the economy will go down, and the moment investors see that we have an economic decline, they will not make any investment, despite the economic recovery package. At this moment, all companies are looking with greater caution at making new investments, at making new hires, even at coming to Romania. All this public chatter within the governing coalition, all this rhetoric of the PSD, which is the main governing party, towards Prime Minister Bolojan causes investors to be even more cautious. For them, the tax system does not matter, which is still very good compared to other countries, but they have many question marks related to Romania's political and economic future. As Nikolai Petrov, portfolio manager at Amundi, the largest money manager in Europe, says: Romania's political and fiscal stability are of paramount importance. And when investors look at how the PSD, even a part of the PNL, and now the UDMR, are holding a knife to the throat of Prime Minister Ilie Bolojan, things become much more serious than we think in Romania's assessment. The economy, business, companies, consumers, i.e. Romanians, need a short-term incentive to let the money go. Prime Minister Bolojan missed the increase of the minimum wage for the economy from January 1, which is an extremely important strategic mistake. And those who were the most vehement against the minimum wage increase, SMEs and HoReCa, are recording the lowest sales for many years. The decrease in sales, the lack of customers are greater than the increase that should have been covered by the increase in the minimum wage in the economy. Also, the increase in VAT on sales of new homes from 9% to 21%, blocked the residential real estate market, registering a decrease in transactions both in the segment of new homes and in the segment of old homes. Last year, housing sales fell by 5%, but the richest area, Bucharest-Ilfov, which represents 35% of the total market, had a 9% decrease. The downward trend in residential real estate transactions continued in January, and brokers say it will continue in the coming months, in the most optimistic version until the middle of the year. For Americans, home sales represent one of the most important economic indicators, right after the creation of new jobs. Selling a home has the highest multiplier in the economy. Because it means unlocking some money, taking a loan (and financial intermediation is part of the GDP), paying taxes and fees to the state, renovating apartments, which means increasing sales of interior materials, increasing sales of furniture, increasing sales of household appliances, etc. Not to mention the commission, which later goes into the purchase of a bottle of champagne. More or less, the whole economy participates when an apartment is traded. If there is no trade, the whole economy loses. And you have 21% VAT for nothing. Because the transactions decreased, because the VAT increased, and the sellers increased the prices. And everything leads to a blockage that is felt throughout the economy. If Prime Minister Bolojan does not quickly come up with some measures to revive consumption, to revive developments, constructions and sales in the real estate area, the economy will continue to decline, which will also mean a problem for the budget. Until we figure out what structural problem we have with the economy, we need to see how it can be relaunched now, not a year from now, when we will wake up to a bigger economic downturn. The economic decrease in Q4 of 1.9% compared to Q3 was much higher than expected, and analysts have already started to revise the data for the whole year, given that we are only in the second month of the year. For example, Erste/BCR announced that it is reducing the economic growth forecast for this year from 2.1% to 1%, which is quite a big drop. So Prime Minister Bolojan and his team of economists should focus on what to do in the short term, so that this technical recession does not turn into a continuous economic decline and later into an economic crisis, and then we will see how more people are fired, how economic activity is reduced, how wages are reduced and how everyone even stops spending anything. We are not in any economic crisis now, but if we do nothing, and here I mean those who are in government, we will end up in crisis. And then we will see how the money leaves Romania.
For other news, analyses, articles and business information in real time, follow NV on WhatsApp Channels