We had the pleasure of hosting the Rethink Romania conference, dedicated to current economic issues and development directions for Romania at the National Bank of Romania, In the opening message, I showed that the worsening security situation in the Middle East and the increase in oil prices indicate a risk of contagion for the European Union economies as well. War, geopolitical turbulence and risks of economic contagion show that the need for prudent policies is more acute than ever.
In the opening speech there were several key messages, such as:
The worsening security situation in the Middle East is severely amplifying uncertainty and increasing volatility globally, especially in energy markets, but also in financial markets, which are particularly sensitive to such security turbulence.
Romania has a lower net dependence on oil energy imports than other European economies, of about 1.5% of GDP – as an annual average in the period 2022-2024, with a tendency to reduce towards 1% of GDP in 2025. However, exposure to the consumer goods price channel remains an important one.
Our estimates show that a permanent 10% increase in the price of oil will have an annual impact on inflation of about +0.3 percentage points, which would require a rethinking of current inflation estimates. And the prospect of a protracted, full-scale war will highlight a propagated and persistent impact.
At the same time, I insisted on the fact that, for Romania, there is no rational alternative to the need to consolidate public finances. Reducing the budget deficit is not optional, but an essential condition for the credibility of state policies.
As a central bank, we take the issue of fiscal consolidation very seriously, including from the perspective of the impact on inflationary pressures and sovereign risk.
Macroeconomic developments show that the economy is gradually changing its sources of growth. Particularly important for 2025 is the increased contribution of investments to the contribution of consumption, of 1 percentage point versus 0.4 in the case of consumption.
We need to accelerate this path, through measures to expand competitiveness in the business environment, in order to achieve a revival of production, which shifts the focus from demand to supply, from consumption to domestic production.
Building trust in state policies is essential. In this regard, we hope to soon have the budget for 2026, which will provide a signal of political and economic stability, which is particularly important in these complicated times.
This is the full message from the opening of the Rethink Romania conference.
