An analysis carried out by the Concordia Employers’ Confederation highlights the fact that the instability on the political scene in Romania is already generating additional costs for the economy, reflected in the increase in interest rates at which the state borrows, the evolution of the exchange rate and pressures on loan rates.
„Romania is already paying a daily penalty for the instability and the overlapping crises it is going through. The interest rates at which the state borrows have increased sharply, by almost one percentage point compared to the February level, from 6.4% to 7.31%. If the instability persists, these increases may deepen even further, which means higher costs for companies and higher monthly rates for the population,” the press release states.
The Concordia Employers’ Confederation draws attention to the fact that credit rates could increase by 7.5-10%, reducing the population’s disposable income and affecting consumption, and the euro exchange rate could reach 5.20 lei, from 5.09 lei, with a rapid impact on inflation.
In the medium and long term, Concordia warns that the deterioration of the fiscal situation could lead to the loss of the country’s „investment grade” rating.
„If this crisis compromises the reduction of the budget deficit, Romania risks losing its investment grade country rating. Hungary went through this scenario and paid with a 3 percentage point increase in financing costs. Applied to Romania, such a scenario would generate additional interest expenses of +4 billion lei in 2026, +12 billion in 2027, +22 billion in 2028, +30 billion in 2029 and +33 billion in 2030, i.e. over 100 billion lei in five years,” the analysis also shows.
Regarding European funds, the analysis carried out by the Concordia Employers’ Confederation indicates significant risks regarding the implementation of the PNRR. In the optimistic scenario, Romania could lose at least 30% of the amounts related to 2026, approximately 3.5 billion euros.
„In this situation, there are two possible options. If the projects stop, economic growth decreases by 0.2-0.3 percentage points, the state loses 600-700 million euros in uncollected taxes, and the budget deficit reaches 6.43% of GDP, accompanied by higher unemployment and bankrupt companies. If, on the other hand, the state covers the difference from its own budget to continue investments, the deficit rises to 6.9% of GDP, a level that is difficult to finance in the context of rising borrowing costs,” the Concordia analysis also mentions.
In the negative scenario, however, the losses would be even greater and could reach 50%, or about 5.7 billion euros.
„Without budgetary compensation, economic growth decreases by 0.35-0.40 percentage points, the state loses 1.4-1.5 billion euros in tax revenues, and the deficit increases to 6.61% of GDP. With compensation from public funds, the deficit exceeds 7.2%, a level that directly endangers the country’s rating,” the analysis shows.
In the critical scenario at 70%, the equivalent of losses is approximately 8 billion euros, with most of the reforms assumed through the PNRR being missed.
„Without compensation, GDP decreases by 0.6-0.7 percentage points, fiscal losses reach 1.9-2.0 billion euros, and the deficit rises to 6.75%. With coverage from national funds, the deficit reaches 7.8% of GDP, with a high probability of downgrading to junk status,” Concordia also notes in the analysis.
Representatives of the organization emphasize that the effects of political instability are borne by both companies and citizens and call on political decision-makers to quickly restore investor confidence and the predictability of economic policies.