Romanian prime minister touts lower budget deficit, new plans for economic recovery
Romanian prime minister Ilie Bolojan stated on Wednesday, January 21, that the executive is working on the 2026 budget, aiming for economic recovery and new investments.
The PM added that reducing the budget deficit by over 1% of GDP, maintaining investments, and increasing revenues have contributed to regaining Romania’s credibility on the financial markets, even if the fiscal adjustments have generated economic difficulties for the population.
“The savings achieved in the second half of last year allowed us to reduce the budget deficit by over 1% of GDP, below the assumed target of 8.4%. We respected our commitments and regained credibility in the eyes of investors and the financial markets, Bolojan said on Facebook.
He highlighted investments worth RON 137.5 billion (EUR 27 billion), representing over 7% of GDP.
“European funds, including those from the PNRR, recorded a high level of over-contracting, and projects were prioritized. We maintained financial discipline and went through the first stage of reducing state spending. We increased budget revenues, including by raising certain taxes. These adjustments generated an economic contraction and meant additional difficulties for many Romanians,” the official noted.
The sacrifices, however, created the basis for an economic relaunch in 2026.
“We are working on the construction of the budget for 2026 on a realistic foundation. The deficit target is a little over 6% and will be finalized in the coming period. Inflation will fall toward 4%. Our objective is a budget for relaunch and investments. Over EUR 15 billion will come from European funds, through the PNRR and cohesion policy,” he added.
The government is set to take responsibility for the legislation that will restrict state spending in the administration and support the economic recovery in the new budget. The measures have long been awaited by a large part of the population, which saw the state increase taxation instead of reducing its overspending.
However, allies of the prime minister within the Social Democratic Party and the National Liberal Party, which he heads, have voiced opposition to the spending cuts in recent weeks. Members of the two parties even discussed replacing Ilie Bolojan as prime minister with a more malleable figure.
(Photo source: gov.ro)
