Romania buildings

Romania Government Consumption

Romania Government Consumption

Government Consumption in Romania

The Romanian economy recorded an average growth rate of 2.5% in government consumption over the decade to 2022. In 2022, government consumption growth was 5.4%.

Romania Government Consumption Chart

Note: This chart displays Government Consumption (ann. var. %) for Romania from 2014 to 2023.
Source: Macrobond.

Romania Government Consumption Data

2019 2020 2021 2022 2023
Government Consumption (ann. var. %) 7.2 1.1 1.8 -3.3 6.0

GDP rebounds in Q1

GDP bounced back in the first quarter, increasing 0.4% on a seasonally adjusted quarter-on-quarter basis, above the 0.6% contraction logged in the fourth quarter of last year but slightly below the flash estimate of 0.5%. On an annual basis, economic growth gained steam to 1.6% in Q1, from the previous period's 1.1% growth.

The improvement was chiefly driven by external demand: Exports of goods and services rebounded, growing 3.3% seasonally adjusted quarter on quarter in the first quarter (Q4 2023: -0.8% s.a. qoq), which marked the best reading since Q3 2022. Meanwhile, imports of goods and services growth picked up to 3.5% in Q1 (Q4 2023: +1.7% s.a. qoq). Looking at the domestic front, household spending contracted 0.6% in Q1 (Q4 2023: +2.8% s.a. qoq), marking the worst result since Q1 2023. Moreover, fixed investment plunged at the steepest rate in over two years, falling 1.9% in the first quarter (Q4 2023: +4.4% s.a. qoq). Government spending contracted at a more moderate rate of 0.1% in Q1 (Q4 2023: -1.2% s.a. qoq).

Our panelists expect GDP growth to gain further steam in Q2, and early data backs this projection: In April–June, economic sentiment averaged above Q1’s levels. The economy is poised to maintain its momentum in H2, as declining inflation supports domestic demand.

Dorina Ilasco, analyst at Erste Bank, commented on the outlook: “For this year, we see GDP growth accelerating a bit vs. 2023 […] Private consumption should be supported by lagged effects from robust increases in real wages amid cooling inflation and increase in minimum wages in July, [a] scheduled rise in public pensions in autumn and government spending. Investments should continue to support growth, albeit at a slower pace relative to 2023, thanks to inflows of EU funds.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Romanian government consumption projections for the next ten years from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable government consumption forecast available for Romanian government consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Romanian government consumption projections.

Want to get access to the full dataset of Romanian government consumption forecasts? Send an email to info@focus-economics.com.

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