Romania's budget deficit climbs to 2.43% of GDP in the first seven months of 2023

Romania's budget deficit reached RON 38.6 bln (EUR 7.8 bln) or 2.43% of GDP in the first seven months of 2023, up from RON 26.7 bln or 1.89% of GDP in the same period last year.

The budget revenues went up 11.5% year-on-year in the first seven months, to RON 288 bln, mainly due to higher revenues from the income tax (+22.3% yoy). The collected social contributions increased 13.3% year-on-year, followed by revenues from the tax on company profits (+11.3%) and VAT (+10%).

Meanwhile, the budget expenses went up by 14.6% compared with the first seven months of 2022 to RON 322.7 bln. The state's personnel expenses went up by 9.7%, those for the acquisition of goods and services increased by 11.4%, and welfare expenses grew by 8.9%.

The state's investment expenses, both from national and EU funds, surged by 47% year-on-year to almost RON 39 bln.

The ruling coalition has been trying for several weeks to come up with a fiscal and budget reform aimed at limiting the deficit growth, but the content of this reform hasn't been made public yet. However, Prime Minister Marcel Ciolacu (PSD) recently said his cabinet would take responsibility in the Parliament for this fiscal reform to have it passed faster and without debate or amendments.

(Photo source: Alexandru Marinescu/Dreamstime.com)