Fiscal consolidation measures and the new deficit target of 8.4% of GDP based on the national cash methodology will bring the budget deficit based on the European ESA methodology to a level between 8.7%-9% of GDP, according to a report by The Tax Institute authored by tax experts Gabriel Biri\u0219 and Sebastian \u0218erban. Romania\u2019s ESA deficit was 9.28% of GDP last year.\u00a0<\/p>\n
The differential to the cash deficit would be 0.3%-0.6% of GDP, compared to just over 0.6% of GDP in 2024.<\/p>\n
The Tax Institute\u2019s estimate for this year is based only on the trends seen over the past year in the differential between ESA and cash expressions of the public deficit.\u00a0<\/p>\n
Over the long-term periods, however, the two definitions tend to converge \u2013 except for a differential related to structural differences in classification (e.g., how ESA records capital transfers vs. how treasuries record them). In any case, deferred payments \/ late revenues accounted under ESA in the current financial year are expected to show up in the next year\u2019s budgets accounted under the cash methodology, bringing the two definitions closer.<\/p>\n