Romania may revise fiscal consolidation plan as 2024 ESA public deficit exceeded initial estimate

Romania’s general government budget deficit under the methodology used by the European Commission (ESA) measured 9.24% of Romania’s GDP in 2024 (up from 6.4%-6.5% in 2022-2023), according to preliminary data consulted by Profit.ro.

The European Commission will publish the first estimate of Romania’s 2024 ESA deficit on April 22. The figure, if much different from the 7.9% used by Romania and the EC as the starting point for the 7-year fiscal consolidation plan drafted and endorsed in October-November 2024, may force the authorities to reconsider the consolidation path.

Based on a 7.9%-of-GDP ESA deficit in 2024, Romania set a 5.1% increase in the net primary (non-interest) expenditure for 2025 – slightly faster than the 5% projected GDP deflator.

The government of Romania plans to cut non-interest current expenditures to GDP ratio by 4.4 percentage points (pp) from 30.9% in 2024 to 26.8% in 2031 over the seven-year fiscal consolidation calendar submitted to the European Commission under the Excessive Deficit Procedure (EDP).

The government has pledged to cut the public deficit from 7.9% of GDP in 2024 to 2.5% in 2031, implying a 5.4pp improvement (fiscal consolidation).

Current revenues will contribute only 1.5pp to the fiscal consolidation, rising from 29.6% in 2024 to 31.1% in 2031.

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