Romania's Deficit Drops to 2% of GDP, Reaching 41 Billion Lei

Romania has achieved a significant reduction in its budget deficit, reaching 2% of GDP in the first half of 2026, a notable improvement from 3.64% in the corresponding period of 2025. The Ministry of Finance reported on July 24 that this fiscal consolidation has led to an absolute deficit of 41.03 billion lei, a decrease of nearly 28.8 billion lei compared to the 69.80 billion lei recorded in the first six months of last year.

The improved fiscal performance is attributed to a robust increase in state revenues, which grew by 10.3% year-on-year to 342.52 billion lei. As a share of GDP, revenues rose by 0.46 percentage points. The Ministry highlighted higher collections from value-added tax (VAT), income tax, and property taxes, alongside successful absorption of European funds, as key contributors to this revenue growth.

Concurrently, state expenditures, while increasing nominally to 383.55 billion lei (a 0.8% rise), decreased as a proportion of GDP from 19.85% to 18.66%. This reduction in expenditure's GDP share, amounting to 1.19 percentage points, further aided the deficit reduction. Notably, personnel expenses decreased by 3.3 billion lei due to measures limiting bonuses and tempering salary increases, falling from 4.5% to 4% of GDP. However, spending on goods and services increased by 8.6%, largely driven by higher healthcare payments, and interest expenses rose by 4.14 billion lei.

“

The execution of the general consolidated budget as of June 30, 2026, concluded with a deficit of 2% of GDP, a decrease of 1.65 percentage points compared to the deficit of 3.64% of GDP recorded in the first six months of 2025. Thus, in nominal terms, the budget deficit decreased by almost 28.8 billion lei, standing at 41.03 billion lei, compared to the level of 69.80 billion lei recorded in the same period last year, confirming the continuity of the fiscal-budgetary consolidation process.