The general government budget deficit narrowed to 1.03% of GDP in the first three months of the year to reach RON 21.09 billion, the Finance Ministry announced on April 28. During the same period of last year, the country posted a deficit of RON 43.66 billion or 2.28% of GDP.

This is a 1.25 percentage point reduction in the budget deficit as a share of GDP, amid rising revenues and controlled spending, the ministry pointed out.

Total state revenues amounted to RON 158.76 billion, up 12.3% compared to the same period last year, while expenditures reached RON 179.85 billion, down 2.8% compared to the first three months of 2025.

The VAT revenues increased by 17.7% during the period, reaching RON 33.63 billion. The growth was supported by higher collections following changes in VAT rates in 2025, the institution said.

The expenses with personnel amounted to RON 40.85 billion, down by RON 1.28 billion compared to Q1 2025, while the goods and services expenses totaled RON 23.56 billion, up 5.8%.

Investment expenditures, including capital spending and development programs financed from domestic and external sources, amounted to RON 21.67 billion, of which 74.92% represents payments for projects financed from non-reimbursable external funds. The interest expenses stood at RON 13.37 billion, up by RON 0.88 billion year-on-year, maintaining a share of 0.7% of GDP.

Social assistance expenses totaled RON 63.54 billion, down 0.2% compared to the same period last year. Subsidies, amounting to RON 2.83 billion, covered passenger transport, support for agricultural producers, and the energy compensation scheme for non-household consumers (RON 16.86 million).

Other expenses totaled RON 2.76 billion, including scholarships for pupils and students, support for religious denominations, civil compensation payments, and amounts related to payment orders issued by the National Authority for Property Restitution.

The expenditures on EU-funded projects amounted to RON 15.84 billion, covering projects financed under the 2014–2020 and 2021–2027 financial frameworks, including EU agricultural subsidies, the Modernization Fund, and projects financed under the National Recovery and Resilience Plan (PNRR).

On the revenues side, the tax on salaries and income generated RON 17.97 billion, up 19%. This increase was driven by a significant rise in dividend tax (+53%) and higher wage tax revenues (+7.6%), impacted by the removal of facilities in the construction, agriculture, food industry, and IT sectors.

The social security contributions totaled RON 53.28 billion, up 7%, while the excise duties amounted to RON 10.95 billion, increasing by 9.2% year-on-year.

Reimbursements from the European Union reached RON 13.20 billion, up 43.5% compared to the first three months of the previous year.

simona@romania-insider.com

(Photo source: Ungureanu Vadim/Dreamstime.com)