Romania’s general government budget deficit increased by nearly 40% y\/y to over RON 11 billion (EUR 2.2 billion) in January 2025, according to data published by the Ministry of Finance. The gap in the first month of 2025 thus measures 0.58% of the GDP projected for the full year, up from 0.45% in January 2024.<\/p>\n
Revenues contracted 1.4% y\/y to RON 46.75 billion, mainly dragged down by lower transfers from the EU budget. The fiscal revenues increased by 2.5% \u2013 a modest performance dragged down by the 12% y\/y lower (net) VAT collected and 20% y\/y lower excise duties collected \u2013 to RON 24.12 billion.\u00a0<\/p>\n
The transfers under the EU’s multiannual financial framework (MFF) 2014-2020 plunged to RON 134 million from RON 2.9 billion in January 2024. No transfers under the MFF 2021-2027 were reported.<\/p>\n
Expenditures increased by 4.5% y\/y to RON 57.75 billion despite the capital expenditures halved (-49% y\/y to RON 2.6 billion) on high base effects after the high defense spending reported in January-February 2024.<\/p>\n
Payroll expenditures increased by nearly 20% y\/y (to RON 14.01 billion) despite the government’s promise to freeze the wages in the budgetary sector \u2013 indeed, at the levels seen at the end of 2025 and not in January 2024.\u00a0<\/p>\n
The interest paid on public debt more than doubled (+133% y\/y) to RON 3.8 billion and accounted for 6.7% of the month’s total expenditures, up from 3.0% in January 2024.<\/p>\n
The share of public debt interest increased to 5.0% of total expenditures (2.1% of GDP) in 2024 from 4.9% of expenditures (1.9% of GDP) in 2023, and the upward trend is putting pressure on the country’s overall budget as the public debt is rising from under 50% in 2023 to above 60% in the coming years.\u00a0<\/p>\n
The rating agencies lowering the outlook on the country’s sovereign rating has a negative impact in this regard.<\/p>\n