Romania’s budget deficit, meaning the gap between revenues and expenditures, reached 3.39% of GDP after the first five months of the year, while the new government grapples with balancing initiatives.
The deficit increased compared to the first four months, when it stood at 2.95% of GDP, and remained roughly stable compared to the first five months of 2024, when it was 3.41% of GDP.
In absolute terms, the budget deficit reached RON 64.23 billion (EUR 12.91 billion) in January–May 2025, compared to RON 60.10 billion (EUR 12.08 billion) in the same period of 2024.
Total revenues amounted to RON 256 billion (EUR 51.45 billion) in the first five months of 2025, marking a 13.6% year-on-year increase, supported by the growth in current revenues, mainly income tax, social security contributions, and excise duties, as well as EU fund revenues. As a share of GDP, total revenues rose by 0.7% (+0.5% for current revenues and +0.2% for EU funds), according to official data cited by Economedia.
Receipts from income and salary taxes totaled RON 25.71 billion (EUR 5.17 billion), an increase of 21.7% year-on-year, driven by a significant rise in dividend tax receipts (+86.3%) due to dividends distributed in 2024, taxed at 8%. There was also a positive trend in salary tax receipts (+21.3%), outpacing the 12.1% growth in the wage fund, due to the elimination of tax incentives for employees in construction, agriculture, food industry, and software development sectors.
Social security contributions totaled RON 87.17 billion (EUR 17.52 billion), up 11.5% year-on-year. Corporate income tax receipts amounted to RON 10.50 billion (EUR 2.11 billion), up 4.1% year-on-year, supported by increased tax from businesses.
Net VAT receipts totaled RON 48.99 billion (EUR 9.84 billion), up 2.3% year-on-year. This is explained by higher VAT refunds (+8.4%), reaching RON 13.98 billion (EUR 2.81 billion) in January–May 2025, compared to RON 12.90 billion (EUR 2.59 billion) in the same period of 2024, along with a high base effect and slower turnover growth.
Excise duty revenues amounted to RON 18.51 billion (EUR 3.72 billion), up 17.1% year-on-year, driven by strong collections from tobacco excise (+19.3%) and energy products (+16.8%). Monthly figures tend to be more volatile due to economic operators’ warehousing strategies.
Non-tax revenues reached RON 21.01 billion (EUR 4.22 billion), up 19.3%, with RON 1.6 billion (EUR 0.32 billion) in March from state aid recovered from the National Railway Freight Company (CFR Marfă S.A.).
Amounts reimbursed by the European Union and donations totaled RON 21.98 billion (EUR 4.42 billion), a 32.8% year-on-year increase.
As for expenditures, the consolidated general budget expenditures totaled RON 320.23 billion (EUR 64.37 billion), up 12.2% in nominal terms compared to the same period last year. As a share of GDP, expenditures rose by 0.7 percentage points, from 16.2% in 2024 to 16.9% of GDP in 2025.
Personnel expenditures totaled RON 71.07 billion (EUR 14.29 billion), up 11.3% year-on-year. As a share of GDP, they represent 3.8%, 0.2% higher than last year.
Expenditures on goods and services were RON 38.30 billion (EUR 7.70 billion), up 0.8%. Growth was recorded under the national health insurance budget (+4.1%) for reimbursing subsidized medicines and drugs under national health programs.
Interest payments amounted to RON 22.86 billion (EUR 4.59 billion), which is RON 6.86 billion (EUR 1.38 billion) more than the same period last year.
Social assistance expenditures were RON 106.21 billion (EUR 21.34 billion), up 15.2% year-on-year, mainly due to pension recalculations under Law No. 360/2023, effective September 1, 2024. Social assistance also included RON 1.70 billion (EUR 0.34 billion) for compensating household electricity and gas bills.
Subsidy expenditures were RON 5.76 billion (EUR 1.16 billion), mainly for passenger transport, agricultural producers, and the non-household energy price compensation scheme (RON 544.58 million or EUR 0.11 billion).
Last week, the Economic and Financial Affairs Council, or ECOFIN, adopted a new decision establishing that Romania has not taken effective action in response to Council recommendations in the context of the Excessive Deficit Procedure. Romania is expected to come up with an updated fiscal plan by the July 8 ECOFIN meeting in order to avoid sanctions under the Excessive Deficit Procedure.
(Photo source: Andrii Yalanskyi | Dreamstime.com)
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