Romania’s budget deficit between January-November 2025 has reached 6.4% of GDP, or RON 121.77 billion (EUR 24.35 billion), down 0.74% compared to the deficit recorded in the same period of 2024, which was 7.15%.

Romania’s budget deficit at the end of 2024 was 8.65% of GDP (approximately RON 153 billion (EUR 30.6 billion). According to the European methodology (ESA), it was 9.3% of GDP, the highest in the EU, as it also includes payments deferred from 2024 to 2025.

The deficit skyrocketed in 2024 due to increased spending by the PSD–PNL government led by former Social Democrat leader Marcel Ciolacu in the super-election year. To get back within the community’s budgetary rules, Romania agreed with the European Commission on a budget deficit target of 8.4% of GDP for this year. 

Last month, Liberal (PNL) prime minister Ilie Bolojan noted that the government’s fiscal consolidation measures are beginning to show results, citing a 12.5% rise in state budget revenues and a drop in personnel spending in the third quarter, among other indicators. He pointed to the improving figures and stronger market confidence as signs that Romania is “on the right path.”

Overall budget

In total, general government revenues amounted to RON 591.91 billion (EUR 118.38 billion) in the first eleven months of 2025, up by 13% compared to the same period of the previous year. Expressed as a share of GDP, total revenues increased by 1.34%, an evolution supported by both current revenues and European funds. 

Expenditures, amounting to RON 713.68 billion (EUR 142.74 billion), increased in nominal terms by 9.9% compared to the same period of the previous year. Expressed as a percentage of Gross Domestic Product, expenditures for 2025 recorded an increase of 0.59% compared to the same period of 2024, from 36.93% of GDP to 37.52% of GDP. 

Revenues 

Revenues from wage and income tax totaled RON 53.43 billion (EUR 10.69 billion), recording an increase of 19.4% compared to 2024, mainly driven by the significant advance in revenues from the dividend tax (+72.6%), as a result of dividends distributed in 2024, with the withholding of the 8% tax rate. At the same time, revenues from wage tax increased by 20.4%, above the dynamics of the wage fund in the economy, an evolution influenced by the elimination of tax facilities granted to certain economic sectors.

Social insurance contributions amounted to RON 189.71 billion (EUR 37.94 billion), an increase of 10.1% (year on year). The evolution of these revenues reflects the elimination of exemptions from the payment of the health social insurance contribution, as well as a higher transfer to Pillar II pensions compared to the similar period of the previous year.

Revenues from corporate income tax amounted to RON 39.30 billion (EUR 7.86 billion), up by 14.2% (year on year), supported by the advance in corporate income tax revenues.

Net VAT revenues totaled RON 120.59 billion (EUR 24.12 billion), marking an increase of 11.1% (year on year), under conditions of VAT refunds higher by 7.3% compared to the same period last year. 

Excise duty revenues totaled RON 43.69 billion (EUR 8.74 billion), up by 3.7% (year on year), an evolution supported by the increase in revenues from excise duties on energy products (+14.8%).

Non-tax revenues amounted to RON 50.43 billion (EUR 10.09 billion), up by 8.6%, an evolution supported by transfers from the net revenues of the National Bank of Romania and revenues from the sale of greenhouse gas emission certificates.

Amounts reimbursed by the European Union for payments made and donations totaled RON 54.34 billion (EUR 10.87 billion), recording a significant increase of 47.5% (year on year).

Expenditures

Personnel expenditures amounted to RON 154.13 billion (EUR 30.83 billion), up by 4.1% compared to the same period of the previous year. Expressed as a share of GDP, they represent 8.1% of GDP, 0.3% less than in the similar period of 2024, as a result of a reduction of certain bonuses and measures to limit wage expenditures. 

Expenditures on goods and services amounted to RON 87.94 billion (EUR 17.59 billion), up by 4.7%, an evolution mainly driven by increases at the level of local budgets and by the growth of expenditures within the National Single Health Insurance Fund.

Interest expenditures amounted to RON 48.81 billion (EUR 9.76 billion), RON 13.48 billion (EUR 2.70 billion) higher than in the same period of the previous year.

Social assistance expenditures totaled RON 229.37 billion (EUR 45.87 billion), up by 11.7%, an evolution mainly influenced by the recalculation of pensions in the public system as well as by payments made to compensate electricity and natural gas bills, amounting to RON 2.88 billion (EUR 0.58 billion).

Subsidy expenditures amounted to RON 10.86 billion (EUR 2.17 billion), mainly representing subsidies for passenger transport, support for agricultural producers, and the scheme for compensating electricity and natural gas consumption for non-household consumers.

Expenditures related to projects financed from non-reimbursable external funds, including EU subsidies related to agriculture, amounted to RON 67.05 billion (EUR 13.41 billion), up by 37.43% compared to the same period of the previous year.

Investment expenditures, which include capital expenditures as well as those related to development programs financed from internal and external sources, amounted to RON 108.39 billion (EUR 21.68 billion), 16.41% higher compared to the same period of the previous year.

radu@romania-insider.com

(Photo source: Alexandru Marinescu | Dreamstime.com)