The ruling coalition, after its meeting on March 9, agreed that the Romanian Finance Ministry will publish the 2026 budget plan on March 10 and the government will approve the final draft during the week so that the Parliament can begin debates next week, according to Agerpres. The key elements of the budget were already disclosed, but the macroeconomic assumptions are currently subject to major uncertainty generated by the Middle East conflict and its impacts.
A gloomier global macroeconomic scenario weighs significantly on the country’s already problematic budget construction. While higher inflation would not put at risk the budget target, weaker than expected consumption and slower economic growth are negative to the fiscal consolidation expected this year. So is the higher borrowing cost Romania would have to pay amid investors’ higher risk aversion.
Furthermore, the higher-than-expected inflation will put additional pressure on the recipients of pensions and public sector wages that are being kept from rising for the second consecutive year.
Under extreme macroeconomic impact prompted by the Middle East conflict (still volatile), the European Commission may accept some fiscal slippage from the fiscal consolidation plan, but the additional deterioration in the country’s indebtedness will defer any improvement in the country’s rating.
Furthermore, domestic political factors are challenging the budget draft proposed by the Finance Ministry: the Ombudsman referred the public administration bill, supposed to have a positive budgetary impact of RON 2.2 billion (EUR 400 million, 0.1% of GDP), to the Constitutional Court, and the Social Democrats (PSD) keep questioning provisions with social impact such as the size of the social package and whether the budget plan would accommodate the rise in the minimum statutory wage as of July. PSD president Sorin Grindeanu said it would decide on Sunday, March 15, whether to support the budget law and, at the same time, whether to stay in the ruling coalition.
President Nicușor Dan declared on March 5, in Poland, that following discussions with representatives of all parties in the ruling coalition, he can say “with full responsibility” that Romania will have a budget in March.”
The main elements of the state budget for 2026 included in the draft that will be published, according to the press release published by the Liberal Party (PNL) after the March 9 coalition meeting are: record level of investments for 2026 namely RON 165.8 billion (EUR 32.5 billion, over 8% of GDP) up from RON 138 billion in 2025; and RON 9 billion (EUR 1.8 billion) supplementary resources available to the administrative-territorial units (local administration – cities, towns, villages) through the amounts collected from local taxes and duties and transfers from the state budget.
The total revenues are estimated at RON 738 billion (36.1% of GDP) and total expenditures are planned at RON 865 billion (42.3% of GDP), both under cash terms. The budget deficit would thus reach RON 127.7 billion (6.2% of GDP, cash), according to Economedia.ro.
iulian@romania-insider.com
(Photo source: Vlad Ispas/Dreamstime.com)
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