Romania\u2019s 2025 budget aims to restore fiscal balance after years of widening deficits, but analysts warn that success hinges on political stability and global economic conditions, according to a new report from the Romanian Economic Monitor (RoEM), a research project of the Babes Bolyai University in Cluj-Napoca.\u00a0<\/p>\n
The government projects a budget deficit of 7% of GDP, down from 8.6% in 2024, signaling its commitment to fiscal consolidation. However, the plan relies on moderate economic growth (2.5%) and an inflation target of 4.4%, which analysts say could be at risk from unforeseen economic shocks.\u00a0<\/p>\n
\u201cThe budget relies on realistic assumptions, but external and internal uncertainties could derail these projections,\u201d said Levente Sz\u00e1sz<\/strong>, prorector at Babe\u0219-Bolyai University and coordinator of the RoEM research team.<\/p>\n The government aims to increase revenues from 32.6% to 34.9% of GDP, mainly through higher tax collection and better absorption of EU funds. Spending will rise only marginally, from 41.2% to 41.9% of GDP, with planned cuts in public sector operational costs while preserving wages and pensions at 2024 levels.\u00a0<\/p>\n \u201cA key strategy is shifting public investments towards EU-funded projects, which could offset cuts in state-funded investments and boost economic growth,\u201d Sz\u00e1sz added.<\/p>\n Despite efforts to close the fiscal gap, Romania\u2019s tax-to-GDP ratio remains one of the lowest in the EU, trailing the EU average by over 5 percentage points.\u00a0<\/p>\n The RoEM report highlights that structural issues in tax collection, rather than low rates alone, are a major constraint on revenue growth.\u00a0<\/p>\n Analysts identify two critical risks that could jeopardize Romania\u2019s budget targets: political instability – if the government fails to maintain fiscal discipline, the deficit could exceed 7%, undermining investor confidence and triggering credit downgrades \u2013 and external pressures – a slowdown in Germany\u2019s economy and potential US trade tariffs could hurt Romania\u2019s exports, adding pressure to the budget.<\/p>\n andrei@romania-insider.com<\/em><\/p>\n (Photo source: PR)<\/em><\/p>","protected":false},"excerpt":{"rendered":" Romania\u2019s 2025 budget aims to restore fiscal balance after years of widening deficits, but analysts warn that success hinges on political stability and global economic conditions, according to a new report from the Romanian Economic Monitor (RoEM), a research project of the Babes Bolyai University in Cluj-Napoca.\u00a0 The government projects a budget deficit of 7% […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3754","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/3754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3754"}],"version-history":[{"count":0,"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/3754\/revisions"}],"wp:attachment":[{"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}