Romania’s cons budget gap inches up to 0.45%/GDP in Jan

The consolidated budget deficit totalled 7.89 billion lei ($19.674 billion/ 18.079 billion euro) in January, as revenues rose 19.7% year-on-year to 47.39 billion lei, whereas spending increased by an annual 26.7% to 55.28 billion lei, the finance ministry said in a budget report published on Wednesday.

The rise in revenues was mainly supported by insurance contributions, VAT payments, excise duties and the inflow of European funds. Amounts reimbursed or granted by the EU totalled 4.15 billion lei in January, surging 159.9% on the year.

Total spending was equivalent to 3.18% of GDP in January, up by 0.44 percentage points year-on-year. Social assistance expenditure amounted to 35.8% of all spending, while staff expenses and the costs of goods and services accounted for 21.4% and 12.9%, respectively.

Investments totalled 7.37 billion lei in January, growing more than fourfold over the same period of 2023. Non-refundable external financing sources represented 31% of total investment expenditure.

Romania’s budget plan for 2024 projects a budget deficit equivalent to 5% of GDP and higher revenues spurred by an expected economic growth of 3.4%.

In February, the International Monetary Fund (IMF) projected fiscal deficits exceeding 6% of GDP for Romania in the next few years, urging the country to boost its fiscal consolidation efforts to restore the soundness of government finances by enacting substantial policy reforms.

(1 euro=4.9728 lei)