The political instability in Romania is beginning to translate into concrete costs for the economy, companies, and the population. Higher interest rates on loans, pressure on the exchange rate, and serious risks for European funds are just a few of the already visible effects.
An analysis conducted by Confederația Patronală Concordia shows that these developments could have direct consequences on the standard of living and the financial stability of the country.
Increasing Interest Rates and Higher Rates for the Population
The first signs of the economic impact are seen in the cost of state financing. The interest rates at which Romania borrows have increased rapidly, from 6.4% in February to 7.31% currently, indicating a deterioration in investors' perception of risk.
If the instability persists, these costs could continue to rise, meaning higher expenses for the public budget, but also direct effects on the population. Loan rates could rise by 7.5% to 10%, reducing available incomes and affecting consumption.
Pressure on the Exchange Rate and Higher Inflation
Another immediate effect is the pressure on the exchange rate. According to the analysis, the euro could rise from 5.09 lei to 5.20 lei, a depreciation of 1-2%.
Given Romania's high degree of exchange rate pass-through to inflation, this development will quickly be reflected in prices. In essence, a weaker currency means higher prices for goods and services, directly affecting purchasing power.
High Stakes: Country Rating and Long-Term Costs
In the medium and long term, the risks are much higher. If Romania fails to reduce the budget deficit, there is a danger of losing the country's "investment grade" rating.
A recent example is Hungary, where such a downgrade led to an increase in financing costs by approximately 3 percentage points. "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, totaling over 100 billion lei in five years," as stated in Concordia's press release.
To cover these costs, the state may be forced to increase VAT by another 3 percentage points or raise other taxes, a perspective with a direct impact on the economy and the population.
PNRR at Risk: Billions of Euros Could Be Lost
Another major risk concerns the funds from the National Recovery and Resilience Plan (PNRR). In the optimistic scenario analyzed by Concordia, Romania could lose at least 30% of the expected amounts in 2026, approximately 3.5 billion euros.
"In this situation, there are two possible scenarios. If projects stop, economic growth decreases by 0.2-0.3 percentage points, the state loses 600-700 million euros from unrealized taxes, and the budget deficit reaches 6.43% of GDP, accompanied by higher unemployment and bankrupt firms. 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 increasing borrowing costs," as stated in the analysis.
Negative Scenarios: Higher Deficit and Risk of "Junk" Status
In a more pessimistic scenario, Romania could lose up to 50% of the PNRR funds, approximately 5.7 billion euros. Without compensation, the economy would visibly slow down, and tax revenues would decrease. With compensation from the budget, the deficit would exceed 7% of GDP, a level that puts pressure on state financing.
The most severe scenario, referred to as the "critical scenario" by analysts, indicates losses of up to 70% of the funds, approximately 8 billion euros. In this case, the deficit could rise to 7.8% of GDP, with a high risk of the country's rating being downgraded to "junk" status.
The Real Cost of the Political Crisis
The analysis's conclusion is clear: the cost of political instability is not abstract but is directly paid by companies and citizens. Higher interest rates, increased rates, inflation, and higher taxes are effects that can quickly emerge.
"Political decision-makers have a duty to quickly restore confidence in Romania's private sector, investors, and citizens towards the direction, stability, and predictability of Romania," warns Concordia.