Romania's general government budget deficit increased by nearly 40% y/y to over RON 11 billion (EUR 2.2 billion) in January 2025, according to data published by the Ministry of Finance. The gap in the first month of 2025 thus measures 0.58% of the GDP projected for the full year, up from 0.45% in January 2024.

Revenues contracted 1.4% y/y to RON 46.75 billion, mainly dragged down by lower transfers from the EU budget. The fiscal revenues increased by 2.5% – a modest performance dragged down by the 12% y/y lower (net) VAT collected and 20% y/y lower excise duties collected – to RON 24.12 billion. 

The transfers under the EU's multiannual financial framework (MFF) 2014-2020 plunged to RON 134 million from RON 2.9 billion in January 2024. No transfers under the MFF 2021-2027 were reported.

Expenditures increased by 4.5% y/y to RON 57.75 billion despite the capital expenditures halved (-49% y/y to RON 2.6 billion) on high base effects after the high defense spending reported in January-February 2024.

Payroll expenditures increased by nearly 20% y/y (to RON 14.01 billion) despite the government's promise to freeze the wages in the budgetary sector – indeed, at the levels seen at the end of 2025 and not in January 2024. 

The interest paid on public debt more than doubled (+133% y/y) to RON 3.8 billion and accounted for 6.7% of the month's total expenditures, up from 3.0% in January 2024.

The share of public debt interest increased to 5.0% of total expenditures (2.1% of GDP) in 2024 from 4.9% of expenditures (1.9% of GDP) in 2023, and the upward trend is putting pressure on the country's overall budget as the public debt is rising from under 50% in 2023 to above 60% in the coming years. 

The rating agencies lowering the outlook on the country's sovereign rating has a negative impact in this regard.

iulian@romania-insider.com

(Photo source: Alexandru Marinescu/Dreamstime.com)