Romanian prime minister Marcel Ciolacu has announced he will sign an agreement with the future European Commission to reduce Romania's budget deficit to 3% within seven years. This plan involves an annual reduction of 0.74%. 

The agreement aims to avoid increasing taxes in the near future. 

"I don't think Romania can afford to have tax increases next year," prime minister Ciolacu said, quoted by Profit.ro. 

The European Commission estimates a budget deficit of 6.9% for Romania in 2024, which could serve as the starting point for this reduction program under the new EU financial framework. This framework replaces the excessive deficit procedure and includes rules for public finance stability, encouraging reforms and investments over a four to seven-year period. 

In the first six months of 2024, Romania's budget deficit stood at 3.61% of GDP compared with an official target of 5% of GDP for the whole year.

However, some estimates point to Romania's deficit potentially passing 7% of GDP by the end of this year.

andrei@romania-insider.com

(Photo source: Inquam Photos / Malina Norocea)