Romania’s public deficit reportedly hits 3.43% of GDP in January-May
<p>Romania’s general government budget reached 3.43% in January-May, edging up against the government’s expectations from 3.24% in January-April, according to preliminary data published by <a href="https://www.profit.ro/taxe-si-consultanta/exclusiv-deficitul-pentru-primele-5-luni-luna-mai-nu-a-fost-una-cu-excedent-cum-spera-guvernul-21616256?mc_cid=9bd522d1fe&amp;mc_eid=cd1f92f96c" rel="noopener" target="_blank">Profit.ro</a>.</p>

<p>In April, the government paid in advance pensions accounting for some 0.6% of GDP and reportedly expected to report a monthly surplus in May.</p>

<p>In absolute terms, 3.43% of GDP deficit in January-May means that the public gap has widened by 64% y/y in nominal terms to RON 60.6 billion (EUR 12.2 billion) in the first five months of the year.&nbsp;</p>

<p>Part of the deviation from the planned gap, reflected by its impressive 64% y/y advance, can be attributed to the delayed disbursements from the EU budget under the Resilience Facility and defence spending deferred from 2023 to the first months of this year.</p>

<p>The government officially targets 5% of GDP public deficit this year, down from 5.7% in 2023. However, the independent projections put the gap at nearly 7% (6.6% of GDP under the European Commission’s latest forecast).</p>

<p>Reflecting the discretionary rise in public wages, the pension reform, and the strong public investments and despite the first fiscal corrective package passed in 2023 (with a positive impact of 1% of GDP this year), Romania’s budget deficit will rise from 6.6% of GDP last year to 6.9% of GDP this year (ESA terms), according to the European Commission publishing the Spring 2024 Economic Forecast.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Vlad Ispas/Dreamstime.com)</em></p>