The general government budget deficit in Romania narrowed to 1% of GDP in the first quarter of the year, compared to 2.28% in the same period of 2025, finance minister Alexandru Nazare announced on April 22. Official data will be released after April 25.

This robust Q1 budget execution creates the conditions for this year's deficit to fall within the assumed target of 6.2% of GDP, minister Nazare said.

Romania ended last year with a budget deficit of 8.65% under cash terms.

Alexandru Nazare argued in a Facebook post that the fiscal consolidation contributes to increasing the state's resilience to external crises, Ziarul Financiar reported.

In the first two months of the year, the budget deficit was 0.7% of GDP, given the increase in revenues by 15.7% and the decrease in total expenditures by 1.6%.

The ESA public deficit shrank to 7.9% of GDP, while public debt stayed below 60% of GDP in 2025.

Romania’s general government budget deficit-to-GDP ratio has narrowed to 7.9% in 2025, still the largest among the European Union’s countries, but down from 9.3% in 2024. The gap remains above the 6.5%-6.6% values in the preceding years, according to Eurostat data published on April 22.

The country targets an ESA deficit of under 6.5% of GDP this year.

At the same time, Romania’s public debt-to-GDP ratio increased by 4.5 percentage points y/y to 59.3% of GDP – lower than the EU average. It was the fourth-largest annual increase in the national public indebtedness among the EU countries, after Finland (which reached an indebtedness of 88.5%, 6.2pp up y/y), Bulgaria, and Poland.

iulian@romania-insider.com

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