Romania may revise fiscal consolidation plan as 2024 ESA public deficit exceeded initial estimate
<p>Romania’s general government budget deficit under the methodology used by the European Commission (ESA) measured 9.24% of Romania’s GDP in 2024 (up from 6.4%-6.5% in 2022-2023), according to preliminary data consulted by <a href="https://www.profit.ro/taxe-si-consultanta/exclusiv-ultima-ora-ce-a-calculat-deficitul-bugetar-al-romaniei-pe-2024-a-trecut-de-9-surse-acesta-este-nivelul-de-la-care-romania-trebuie-sa-coboare-in-acest-an-la-7-22001449?mc_cid=2aa8fd65ed&amp;mc_eid=cd1f92f96c" rel="noopener" target="_blank">Profit.ro</a>.&nbsp;</p>

<p>The European Commission will publish the first estimate of Romania’s 2024 ESA deficit on April 22. The figure, if much different from the 7.9% used by Romania and the EC as the starting point for the 7-year fiscal consolidation plan drafted and endorsed in October-November 2024, may force the authorities to reconsider the consolidation path.&nbsp;</p>

<p>Based on a 7.9%-of-GDP ESA deficit in 2024, Romania set a 5.1% increase in the net primary (non-interest) expenditure for 2025 – slightly faster than the 5% projected GDP deflator.</p>

<p>The government of Romania plans to cut non-interest current expenditures to GDP ratio by 4.4 percentage points (pp) from 30.9% in 2024 to 26.8% in 2031 over the seven-year fiscal consolidation calendar submitted to the European Commission under the Excessive Deficit Procedure (EDP).</p>

<p>The government has pledged to cut the public deficit from 7.9% of GDP in 2024 to 2.5% in 2031, implying a 5.4pp improvement (fiscal consolidation).</p>

<p>Current revenues will contribute only 1.5pp to the fiscal consolidation, rising from 29.6% in 2024 to 31.1% in 2031.</p>

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

<p><em>(Photo source: <a href="https://www.dreamstime.com/">Nuthawut Somsuk/Dreamstime.com</a>)</em></p>