Romania’s Budget Deficit Reaches 4.53% of GDP by End of August

Minister Marcel Boloș Explains the Deficit Increase

According to Minister of Finance Marcel Boloș, the significant increase in Romania’s budget deficit is primarily due to the high level of investments, rather than excessive spending on budget equipment.

Boloș pointed out that personnel costs and salary increases have also contributed to the deficit. He mentioned the pay rise that occurred amidst strikes in the public education system, as well as protests in the public health system and other sectors, resulting in salary increases for beneficiaries of the new single salary law.

The budget deficit is expected to rise to 122.8 billion lei, or 6.94% of GDP, from the initial 87 billion lei, or 5% of GDP, stated in the budget law adopted at the beginning of the year.

Record-Level Investments in Romania’s Development

Minister Boloș highlighted that the latest budget operation on August 31, 2024, shows the highest level of investments ever made by the Romanian Government. These investments come from the Cohesion Policy, infrastructure projects, and the National Recovery and Resilience Plan (PNRR), which has an allocated amount of over 29 billion euros.

Comparing Deficits with Other European Countries

Boloș noted that other European countries are also facing excessive deficits. For example, Italy has a public debt of around 121% of GDP and is struggling to cope with debt service and interest payments. France estimates a budget deficit of 5.6% by the end of the year, which is considered extremely high for the country.