Romania’s public deficit shrinks by 44% y/y to 1.75% of GDP in Jan-May

Romania's general government budget deficit narrowed by 44% y/y to RON 35.9 billion (EUR 6.9 billion) in January-May, as the country reduced payroll in the budgetary sector and current expenditures from EU grants (other than investments), according to data published by the Finance Ministry. The deficit-to-GDP ratio dropped to 1.75% from 3.35% in the same period last year, versus a 6.2% of GDP full-year target.

Notably, the deficit correction was operated on the expenditures side in January-May, as expenditures were hindered by the lack of a budget law during the entire Q1, while the main correction driver is expected to be on the revenues side, for the entire year.