Romania's public deficit will drop below 6% of GDP this year, and it will further restrain under 5% of GDP in 2027, depending on still to be confirmed expectations for improved revenue collection, according to JP Morgan managing director Nicolaie Alexandru-Chidesciuc, speaking at the CFA Forecast Dinner in Bucharest, according to Agerpres. The government has not yet drafted the budget plan for this year, but pledged a deficit of at most 6.2% of GDP – down from 7.65% of GDP in 2025 (cash terms).

Under the 7-year budget consolidation plan approved by the European Commission in January 2025, the country's fiscal deficit (ESA terms) should narrow to 6.4% of GDP this year and 5.7% of GDP in 2027. 

If achieving the desired fiscal consolidation this year (and even outperforming the plans a bit) is already secured with the measures already legislated, Chidesciuc believes that "it is a bit more complicated" when it comes to 2027. He said that he sees efforts to narrow the revenue collection gap, which has widened previously.

Public wages and pensions rising being kept under control in real terms, would also contribute, he said.

"On the revenue side, it is mainly about improving collection. It is something that Romania has not managed to do in the last 20 years or so. However, I think something will happen next year. Why? Because I see much more effort in that direction from the current government. And besides that, the imbalances or gaps between what can be collected in terms of the tax level and what is actually collected have increased recently. There is effort in that direction, on the revenue side," explained the economist.

He said he also expects a tight income policy in 2027, even if this will be complicated as well, after two years of no public wage or pension increases.

"On the spending side, after two years in which salaries and pensions were frozen, 2025 and 2026, I don't think it's reasonable to believe that they will remain frozen in 2027 - but I think there will be increases below nominal GDP, which would be enough to continue spending control," Chidesciuc said.

iulian@romania-insider.com

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