Elements of Romania's seven-year fiscal consolidation plan surface in the media

The medium-term fiscal plan that Romania is supposed to send to the European Commission (EC) this month under the Excessive Deficit Procedure has among its objectives cutting the budget deficit to 2.4% in 2031 and bringing the public debt to GDP ratio under 60% by the end of the seven-year period (after possible deviations above the benchmark meanwhile), according to documents consulted by Profit.

The plan reportedly starts with an estimated 7.9%-of-GDP ESA public deficit this year (8% of GDP under cash definition).

The current revenues of the Government budget are set to increase from 29.5% of GDP in 2024 to 31.1% in 2031 as a result of the implementation of milestones 207, 208, and 231 of the Resilience facility (PNRR) regarding fiscal reform, but also the implementation of measures regarding better collection of budget revenues that determine an annual increase in current revenues by least 0.5% of GDP.

The scenario also envisages very high public investment volumes: 7.9% of GDP in 2025, 7.7% of GDP in 2026, 6.6% of GDP in 2027, and more than 5% of GDP in the coming years. The investments thus envisaged are set to ensure the complete absorption of the European funds allocated through the Cohesion Policy.

The EC estimates Romania's public deficit to exceed the 6.9%-of-GDP projection included in the Spring Forecast, according to Profit. The estimates for the new forecast, to be published under the Autumn Forecast soon, started from the value of 7.9% of GDP, sources within the Government reportedly confirmed.

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