Romania – Unemployment rate up to 5.6% in Feb | NEUTRAL

• The National Institute of Statistics (NIS) released this morning the data regarding the evolution of the labour market indicators in Feb, showing a deterioration of the climate, in the context of the severe contraction of the investments at the end of 2024.
• According to the figures, the number of the unemployed (15-74 years) rose by 1.3% M/M to 456.8K in the second month of 2025, the highest level since Dec 2024.
• In Y/Y terms the number of the unemployed advanced by 4.7% in Feb, the strongest pace since Jun 2022.
• During Jan-Feb the number of the unemployed climbed by 1.8% Y/Y, an evolution determined by the deterioration of the investment climate in the last quarter of 2024.
• The unemployment rate rose from 5.5% in Jan to 5.6% in Feb, the highest level since Dec 2024, and also slightly above our forecast of 5.5%.
• One can notice the divergence between the decline of the unemployment rate for men and the increase of the unemployment rate for women.
• The unemployment rate for men diminished from 5.8% in Jan to 5.7% in Feb, the lowest level since Jun 2024.
• However, the unemployment rate for women rose from 5.1% in Jan to 5.3% in Feb, the highest level since Nov 2024, an evolution also influenced by the increase of the minimum wage, with impact especially for the low value-added industries.
• In Feb the unemployment rate presented a level above its trend (for the first time since Dec), according to our econometric estimates represented in the chart on the right side.
• We revised the forecasts for the evolution of the unemployment rate in Romania in the short and mid-run by incorporating the data released by NIS this morning.
• The revised forecasts indicate the increase of the average rate of unemployment from 5.5% in 2024 to 5.6% in 2025, 5.8% in 2026 (vs. the previous forecast of 5.7%) and 5.8% in 2027, as can be noticed in the second chart on the right side.
• In other words, the labour market climate would slightly deteriorate in the coming quarters, a scenario supported by the prospects for the digitalisation of the economy, and for the reform of the public sector | NEUTRAL