Romania’s Fiscal Council (CF), in an opinion issued on October 1, endorsed as credible the 2025 budget revision approved by the government on the same day, stressing that the country’s deficit would have reached 9% of GDP this year under the no-policy-change assumptions.
“Based on the available data, the CF assesses that the new budgetary provisions are compatible with a cash budget deficit of around 8.4% of GDP in 2025, subject to some risks […]. It is worth noting that this new target must be judged in relation to a higher deficit (around 9% of GDP), which would be emerging in the absence of adjustment measures,” the CF’s report reads.
The risks to the macroeconomic projection mentioned by the CF stem from the evolution of the external environment (risk aversion of international markets, with an effect on the volume and cost of financing the Romanian debt, as well as the dynamics of the world economy and, in particular, the European economy), from the size and speed of the absorption of multiannual European funds and those related to the PNRR, as well as from the consistent application of the adopted fiscal-budgetary adjustment plan.
The Fiscal Council also considers that the fiscal measures already legislated are supportive of a 6.5% of GDP deficit next year.
“The fiscal-budgetary package adopted in July has a limited positive impact on the 2025 deficit, influencing budget execution starting in September. However, the effect of reducing the budget deficit will be considerably greater in 2026, leading to a deficit of around 6.5% of GDP, which would represent a significant adjustment compared to the very high values in previous years,” according to the CF’s opinion.
iulian@romania-insider.com
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