Economic analyst Radu Georgescu warns of a worrying downturn in household consumption in Romania, based on data recently released for the month of November. According to him, starting in August 2025, household consumption has entered an accelerated decline—a phenomenon rarely seen in the Romanian economy.
Georgescu points out that roughly 70% of Romania’s Gross Domestic Product is driven by household consumption, meaning that a significant contraction has a direct and substantial impact on the entire economy. He notes that a decline of this magnitude was last recorded in 2009, during the global financial crisis.
The key difference from that period, Georgescu argues, is that there is currently no global financial crisis to justify such a development. In his view, the main cause of the drop in consumption lies in the economic measures adopted by the government starting in August 2025, particularly tax increases.
According to the analyst, these measures have contributed to higher inflation, estimated at around 10%, which has eroded households’ purchasing power. As a result, consumption has fallen, and some companies have reportedly begun reducing staff to cope with weaker demand.
Georgescu recalls that basic economic principles taught at university level show that raising taxes during an economic slowdown can deepen the downturn. In his opinion, the introduction of new taxes from January 1, 2026, risks amplifying existing effects: higher inflation, declining living standards, and a deeper economic recession.
The analyst believes that a large segment of the population is already feeling the impact of these economic developments, even as government measures continue to be officially presented in a positive light. He also notes that the current situation offers a practical lesson in basic economic mechanisms for both the general public and policymakers—although the cost of this “learning process” is being borne by households and the business sector alike.
