Latest data point to subdued quarterly economic growth in Q2 2025 (central bank)

The latest data and analyses point to subdued quarterly economic growth in Q2 2025, amid mixed developments across the aggregate demand components and major sectors compared to the same year-ago period, according to a press statement released on Friday after a meeting on monetary policy of the BNR Board

Thus, in April-May 2025, the annual growth rate of retail sales continued to slow down, while services to households more than reversed the decline seen in the previous quarter.

The annual dynamics of the volume of construction works fell steeply but remained in positive territory after the notable surge in Q1 2025, while the industrial output displayed a significantly slower year-on-year contraction.

According to BNR, new statistical data reconfirm the standstill in economic activity in Q1 2025, after a 0.5% expansion in the previous quarter, as well as the decline in its annual dynamics to 0.3% from 0.5 percent in 2024 Q4.

At the same time, the annual rate of change of exports of goods and services exceeded marginally that of imports April through May 2025, amid the latter's much more pronounced decrease against Q1 2025. Consequently, the annual growth rate of trade deficit almost stopped, while that of current account deficit halved.

Looking at the labour market, the incoming data show both decreases in the number of employees economy-wide in April and May and a drop in the ILO unemployment rate for Q2 2025 overall, after rising to 6.0% in Q1.

The annual growth rate of average nominal gross wage economy-wide continued to decline slowly in the first two months of Q2 2025, while that of nominal unit wage costs in industry corrected only part of the surge in Q1 2025, both thus remaining in double-digit territory. July 2025 surveys point, however, to a sharp, across-the-board decline in employment intentions over the very short horizon in major sectors, as well as to a renewed contraction in labour shortage reported by companies.

Financial market conditions strengthened their normalisation trend in July 2025, amid the completion and adoption of the first package of corrective fiscal measures, which improved financial investors' expectations on the prospects of budget consolidation. Specifically, the main interbank money market rates accelerated their downward adjustment, remaining however visibly above April levels, while long-term yields on government securities continued their decline in the first part of the month, falling to and remaining thereafter at levels below those seen at the end of last year. Moreover, the EUR/RON exchange rate halted its rise in early July and, after fluctuating somewhat, tended to stabilise at the new levels. Against the US dollar, the leu discontinued its appreciation trend and in the last 10-day period of July it weakened relatively abruptly, given the sharp appreciation of the US currency in international financial markets.


The annual growth rate of credit to the private sector lost momentum in June 2025, reaching 9.1% from 9.7% in May amid a significant decline in the brisk tempo of leu-denominated loans, solely on the back of loans to non-financial corporations, which was only slightly dampened in terms of impact by the re-acceleration of growth in foreign currency-denominated credit. The share of the domestic currency component in credit to the private sector thus continued to narrow mildly, to 69.7% in June from 69.8 % in May.

In its meeting of August 8, 2025, the BNR Board decided to keep the monetary policy rate at 6.50 percent per annum; to leave unchanged the lending (Lombard) facility rate at 7.50 percent per annum and the deposit facility rate at 5.50 percent per annum; to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.