Romania, the highest budget deficit in the EU

According to the European Commission, Romania has recorded a budget deficit in ESA terms, an indicator used within the EU, of 9.3%. It is the highest budget deficit recorded in the European Union.

In 2024, all EU member states, except Denmark, Ireland, Cyprus, Greece, Luxembourg and Portugal, reported trade deficits. The highest deficits were recorded in Romania (9.3%), Poland (6.6%), France (5.8%) and Slovakia (5.3%).

Twelve member states had deficits equal to or greater than 3% of GDP, according to Eurostat.

The budget for the current year is built on an economic growth of 2.5% and a budget deficit of 7% of GDP.

The current situation is a very complicated economic one, the risk of recession has increased significantly and we may have a slight recession this year, Adrian Codirlaşu, president of the CFA Romania Association, recently stated.

“The current situation is complicated, even very complicated economically. If we look at the internal side, we have an extremely high budget deficit, with pressures to remain as high, if fiscal consolidation measures are not taken, we have a large current account deficit, and if we look at the external situation, we have a war on the border and a trade war has just started. So both the internal and external environment is difficult. Under these conditions, the risk of recession I would say has increased significantly. So it is possible that we will have a mild recession this year. What could change to lead us to a more severe recession? It would be a downgrade of Romania to the non-investment grade rating category. If we actually look at the economic fundamentals, such as the two deficits, the current account and the budget, these take us out of the investment grade rating category. In case we are downgraded? Yes, we can expect a severe recession, which also comes with higher interest rates and depreciation “the lion”, the CFA president explained.