Romania's budget deficit climbs above 4% of GDP in first seven months of 2024

Romania's budget deficit went up to RON 71 billion (EUR 14.28 bln) or 4.02% of its GDP in the first seven months of 2024, marking an increase of 84%, in absolute terms, compared with the same period of 2023, when it stood at RON 38.6 bln or 2.4% of GDP. In July alone, the deficit went up by 0.4 percentage points, from 3.6% at the end of June.

The government's original deficit target for the year was 5% of GDP, but estimates from the European Commission suggest that the deficit could reach around 6.9% by the end of 2024, with further increases anticipated in 2025 unless additional fiscal measures are implemented.

Government revenues reached RON 331.56 billion (EUR 66.7 bln) in the first seven months, a 15.1% increase year-on-year, supported by higher collections from income taxes, social insurance contributions, and non-fiscal revenues.

Notably, income tax revenues grew by 22%, driven by changes in fiscal regulations and an increase in the minimum gross wage. Additionally, contributions from insurance have increased by 20.7%, while VAT collections rose by 14.8%.

On the expenditure side, the consolidated general budget amounted to RON 402.6 billion (EUR 81 bln), a 23.2% nominal increase compared to the same period in 2023.

Key areas of spending include personnel expenses, which grew by 23.9%, social assistance spending, which rose by 13.9%, and investments, which surged by 46.4% to RON 57 billion.

(Photo source: Alexandru Marinescu/Dreamstime.com)