Daniel Dăianu: Romania risks recession in 2026 due to budgetary correction

Daniel Dăianu, President of the Fiscal Council, is warning that Romania could enter recession in 2026 as a result of the significant impact that budgetary correction is having on the economy.

According to an analysis published by Dăianu, reform of the unified pay system in the public sector is necessary and should be carried out as swiftly as possible, in order to eliminate existing inequities and to avoid sudden increases in public sector wages. In his view, a more predictable pay system would safeguard public finances and reduce additional pressure on the budget.

770 million euros lost, but not the primary cause of a potential derailment

The President of the Fiscal Council clarified that the loss of 770 million euros represents a cost to the budget; however, this sum, taken in isolation, would not be sufficient to trigger a major budgetary derailment. The statement comes amid political disputes surrounding the reform of the unified pay system and the manner in which public finances are being managed.

The role of European funds in 2026

Dăianu emphasises that European funds will play an important role in supporting the Romanian economy this year, even if the country does not succeed in fully absorbing the money available through the National Recovery and Resilience Plan (PNRR). Even if a portion of PNRR funds remains unabsorbed, European resources available through other programmes could contribute significantly to sustaining economic activity — a contribution all the more important given that budgetary adjustment measures are having a restrictive effect on the economy.

Recession risk, partially mitigated by European investment

The President of the Fiscal Council warns that the effects of fiscal consolidation could be strong enough to push Romania's economy into recession this year. In his view, support from European investments and financing can mitigate some of the impact of reduced public spending, whilst pay reform — alongside more prudent management of public finances — is essential if Romania is to avoid further economic imbalances.