Romania’s Finance Ministry may set more ambitious targets for 2026 budget

The draft 2026 budget plan is based on a scenario that includes 1% economic growth and envisages a public deficit of around 6%, Romanian finance minister Alexandru Nazare announced on January 20 after the meeting of the ruling coalition. The final target will be announced after discussions with those involved, he added, Economica.net reported.

Under the 7-year fiscal consolidation plan, Romania’s budget deficit is supposed to narrow at 6.4% of GDP this year and 5.4% of GDP in 2027.

Better-than-anticipated 2025 budget execution may encourage more ambitious plans for 2026 – a scenario floated when such encouraging data started being circulated this week. While probably not bringing a rating upgrade, a realistic 2026 budget aiming at a 6% deficit would provide budgetary slack, particularly important given the current high uncertainties.

Given the abundant inflow of EU grants this year, the 6% of GDP target may actually not be unrealistic and would pave the way to 2027 – when the Resilience Facility money will no longer boost the revenues side.

Romania’s 2025 budget deficit was 7.65% of GDP, versus 8.4% under the latest revised budget plan approved last September, according to preliminary data leaked to the media this week – but it may have been even smaller according to updated reports. Official preliminary data will be available after January 25.

This year’s public budget will particularly focus on economic recovery and investments, with EUR 7.2 billion of grants and EUR 3.5 billion in loans expected under the Resilience Facility plus RON 25 billion (EUR 5 billion) under the Cohesion Fund (transfers) and RON 5 billion (EUR 1 billion) under the EU’s schemes for agriculture, minister Nazare also said.

(Photo source: Facebook/Alexandru Nazare)