Budget deficit falls by 28 billion lei to 2.34% of GDP, but benefit cuts played only a minor role

Romania reduced its budget deficit sharply in the first seven months of the year, but cuts to public-sector benefits contributed only a small share of the improvement. The consolidated deficit reached 48.08 billion lei, down 28.36 billion lei from the same period in 2025.

In nominal terms, the deficit fell by 37%. Its share of gross domestic product declined from 3.99% to 2.34%. The change reflected stronger revenue growth and more restrained spending growth. Revenue increased 11.2%, reaching 412.31 billion lei, while expenditure rose 2.9% to 460.39 billion lei.

Tax revenue grew 15.4% to 214.32 billion lei. Net value-added tax receipts climbed 26.5% to 88.55 billion lei, while excise-tax revenue increased 6.4%. European Union reimbursements for completed payments and donations reached 37.28 billion lei, up 30.3% from a year earlier.

Personnel spending fell by 4.06 billion lei, or 4.1%, to 95.67 billion lei. The Finance Ministry attributed the decline to cuts in certain allowances and wage-control measures. Personnel costs fell from about 5.2% to 4.7% of GDP and from 22.3% to 20.8% of total public spending. The saving represented about 14% of the overall deficit reduction.

Investment spending moved in the opposite direction, rising by 14.83 billion lei, or about 24%, to 76.51 billion lei. Projects financed through non-reimbursable external funds totaled 45.88 billion lei. European Union and National Recovery and Resilience Plan projects accounted for 71.05% of investment spending. Meanwhile, interest costs rose 26.5% to 40.12 billion lei, equivalent to 2% of GDP.