Romanian government approves EUR 2.1 bln fiscal package to reduce deficit

The Romanian government adopted a fiscal corrective package on July 4 worth RON 10.7 billion (EUR 2.1 billion), equivalent to 0.56% of GDP. The package includes tax increases, reductions in public spending, and changes to health insurance contributions aimed at improving the general government budget balance in line with the consolidation trajectory recommended by the European Union under the Excessive Deficit Procedure (EDP).

The public deficit hit 9.3% of GDP in 2024, 1.4% of GDP above the 7.9% estimate included in the medium-term fiscal-structural plan (MTFSP) drafted by Romania last fall and approved by the European Commission in January 2025. The deviation adds pressure to the fiscal consolidation trajectory, which was already revised by the Commission on June 23.