Romania Faces Nearly 4% Budget Deficit Challenge

Romania has reported a budget deficit of almost 4% (3.97% of GDP), equivalent to 62.8 billion lei. The 2023 budget is based on a 4.4% deficit, and it is evident that this target will not be achieved. According to the Ministry of Finance, total revenues amounted to 418.85 billion lei in the first ten months of the year, a 10.6% increase year-on-year.

“Their dynamics were mainly supported by the evolution of revenues from income tax, social contributions, European funds, and corporate tax. VAT revenues recorded a more moderate positive dynamic, explained both by the deceleration of the relevant macroeconomic base and a higher level of VAT refunds,” the ministry stated.

Expenditures of the consolidated general budget totaling 481.66 billion lei increased nominally by 13.1% compared to the same period last year.

“Expressed as a percentage of Gross Domestic Product, expenditures for the first ten months of 2023 increased by 0.2 percentage points compared to the same period in 2022, from 30.2% of GDP to 30.4% of GDP,” according to the cited source.

Personnel expenses amounted to 108.05 billion lei, up by 10.8% compared to the same period last year.

Interest expenses were 28.13 billion lei, 3.72 billion lei more than the same period last year, an increase of 15.2% compared to the same period last year.