Romania’s economy shrinks as retail sales fall and PNRR reforms stall

Retail trade in Romania continued to contract in May 2026, with the volume of sales falling 4.7% year‑on‑year, marking the tenth consecutive month of decline. Adjusted for seasonality, the annual drop was 4.7% and the sector remained 4.5% below the same month of 2025. The slowdown affected all product groups, especially non‑food items (‑7.9% YoY) and fuel sales (‑2.8% YoY).

Unemployment rose to 6.4% in May, up from 5.3% at the end of the previous government, while household consumption weakened, prompting warnings of a deepening economic and social crisis. Construction activity also retreated: residential building permits fell 1.8% in May and were down 14.3% compared with May 2025, with the Centre region recording the sharpest drop.

In the Bacău county, external trade posted a persistent deficit; exports fell 2.1% in March and were 5.4% lower in the first quarter versus a year earlier, while imports remained high, leaving a trade deficit of about €118 million for the quarter.

Interim Prime Minister Ilie Bolojan stressed that absorbing the remaining €4.5 billion of EU grant funding under the National Recovery and Resilience Plan (PNRR) is the country’s top priority for July‑August. He listed six pending legislative reforms – unified pay, incompatibilities, rewarding Finance Ministry staff, civil service, urban planning code and decarbonisation of heating/cooling – each tied to €770‑972 million of PNRR financing. Because the government can no longer use emergency ordinances, Bolojan called for extraordinary parliamentary sessions to adopt the bills.

Opposition figures, including PSD deputy Marius Budăi and former premier Florin Cîțu, accused the Bolojan administration of imposing an “austerity regime” that has deepened poverty and eroded purchasing power. Analyst Mihnea Predețeanu warned that political infighting is pushing core national projects to the background.