The general government deficit of Romania contracted by 53% y\/y to RON 14.2 billion (EUR 2.8 billion) in January-February, according to data published by the Finance Ministry. The deficit-to-GDP ratio reached 0.7%, compared to 1.6% in the same period of 2025.<\/p>\n
The outcome, encouraging for the full year deficit target of 6.2%, was partly due to one-off factors such as the early disbursement of dividends in December 2025 ahead of the higher dividend tax enforced in January, and expenditure restrictions in January-March before the approval of the 2026 budget plan. Other factors, such as robust VAT collection or restricted payroll, could be permanent and have a permanent impact on the level of revenues and expenditures.<\/p>\n
The revenues to budget increased by 15.7% y\/y to RON 103.7 billion, or 5.1% of the GDP planned for the entire year, up from 4.7% of GDP in the same period of 2025. The transfers from the EU budget surged by 87.8% y\/y to RON 8.3 billion, and the revenues from local resources increased by 12.0% y\/y to RON 95.5 billion.\u00a0<\/p>\n
The personal income tax, fueled by the income tax charged on the dividends distributed in December (+57.6% y\/y),\u00a0increased by 22.3% y\/y, and the net VAT collection by 20.0% y\/y.\u00a0<\/p>\n
The ministry explained that the net VAT collection surged by 20.3% y\/y (to RON 23.75 billion) \u2013 well above the combined rise of consumer price inflation (under 10% y\/y) and retail sales\u2019 dynamics (negative). The VAT repayment increased by 18.8% y\/y to RON 7.22 billion.<\/p>\n
Revenues from excise duties amounted to RON 6.90 billion, with a contraction of 0.9% y\/y, caused by lower revenues from excise duties on tobacco products, while revenues from excise duties on energy products increased by 13.8% y\/y.<\/p>\n
The expenditures contracted by 1.6% y\/y to nearly RON 118.0 billion in January-February, or 5.8% of the GDP projected for the entire year, compared to 6.3% in the same period of 2025.\u00a0<\/p>\n
At the same time, investment-related spending showed mixed dynamics and negative growth (-5.8% y\/y to RON 14.7 billion). The expenditures for projects funded from EU grants (including co-financing) increased by 65% y\/y to RON 9.7 billion, the investments financed from national budget revenues or loans contracted by 48.9% y\/y to under RON 5.0 billion, and the rest of expenditures contracted by 1.0% y\/y to RON 103.3 billion.<\/p>\n
The main drivers for the moderate expenditures in the first two months of the year are the restrictions on the increase of wages (payroll contracted by 3.5% y\/y) and pensions (social security spending increased by 0.9% y\/y). The expenditures on goods and services contracted by 2.0% y\/y as the public authorities were operating under the special regime before the approval of the year\u2019s budget.<\/p>\n
The interest paid on public debt increased by only 2.0% y\/y, as it was already high in the first months of 2-25, but it accounted for a wide share of 8.7% of total expenditures of the government, up from 8.5% in the same period last year and 6.2% of expenditures in full 2025.<\/p>\n