IMF expects Romania to deviate significantly from fiscal consolidation plans

Romania's general government budget deficit, expressed in cash terms, will narrow from 8.6% of GDP in 2024 to 7.8% of GDP this year, versus a 7.0% target that remains untouchable for another two years (2026-2027), according to the updated forecast of the International Monetary Fund (IMF) published along with the latest World Economic Outlook edition released on April 23. The slower-than-planned fiscal consolidation would not trigger a sovereign rating downgrade, however, the scenario implies.

At the end of the forecast period, in 2023, the Fund expects Romania's budget deficit at 6.4% of GDP – more than twice the Romanian government's target inked in the fiscal consolidation strategy endorsed by the European Commission under the Excessive Deficit Procedure.