Record expenses in administration. Budget deficit grows, analysts warn on the impact of austerity
The data from the budget executions for June and July, compared by the “Adevărul” revealed an increase of the budget deficit, general for the exaggerated increase of the expenses, including the personnel. The analysts consulted by the “Adevărul” explained that such a result was expected, generated by the austerity measures that bury the economic growth.
All austerity measures “bury” the economic growth
From the data compared by the “Adevărul” regarding the budget execution for the first 6 months and from the 7 months, published by the Ministry of Finance in June and July, the following increases of income and expenses resulted, implicitly the increase of the budget deficit by 6.64 billion lei in a single month.
This increase of the budget deficit is the result of the increase of the public spending by 66.89 billion lei, although the total revenues collected by the state in July were 60.25 billion lei higher than those of June
Deficit with 6.64 billion lei higher in a single month
Thus, the budget deficit increased from 69.80 billion lei in June, to 76.44 billion lei in July, an increase of 6.64 billion lei in a single month.
Total revenues increased from 310.52 billion lei in June, to 370.77 billion lei in July, an increase of 60.25 billion lei.
The expenses of the consolidated general budget increased from 380.32 billion lei in June, to 447.21 billion lei in July – increase by 66.89 billion lei.
Coșea: Austerity measures will increase even more deficit
Economist Mircea Coșea says that all austerity measures taken by the ruling coalition will do nothing but increase the deficit.
“The data you have presented to me are the consequence of the austerity measures. All the measures taken and those that will be taken are to increase the deficit. It is a budgetary, not an economic crisis. And the reduction of the deficit can be done in three ways, practiced by other countries such as Germany, Spain and Portugal: First of all, the business environment must be released from pressure, in order to be able to bring money to the budget. Do not burden it by increasing taxes, that you go bankrupt. Secondly, investments must be stimulated. Either they blocked them.
Thirdly, external funds, such as European ones, attracting private capital, using money through PNRR, which are lost instead of being attracted, must be used. These losses can lead to an economic crisis in the future, given that we now have only one budget crisis“, Explained the economist Mircea Coșa for” Adevărul “.
Asked what awaits us, Mircea Coșea said that nothing good. “All these austerity measures will lead to a massive decrease in consumption, to increase inflation, to increase non -performing loans (ie those loans that can no longer be paid by individuals – n. Red.), To increase the inputs. We cannot expect to decrease the deficit. These measures do not help anyone. A policy of economic relaunch is needed. You have no more to cut, nor where to cut out of expenses, Economic relaunch is needed. The ruling coalition leads us to an even greater deficit ”explained the economist.
Radu Nechita: We are looking for austerity with the magnifying glass in the state budget and we do not find it
For his part, the economist Radu Nechita told “Adevărul” that from the analysis of the budget execution for the first seven months, it appears that the state had higher revenues in 2025 than in 2024, but also spent much more.
“We are looking for the austerity with the magnifying glass in the state budget and we do not find it. Austerity is seen in the taxpayers' budgets, not in the state. The total expenses increased by 44 billion lei, while the revenues increased by only 39 billion.“, Econonist Radu Nechita told” Adevărul “.
The deception of the percentages
“If we look at the percentages, we might think we were fine, because the revenues increased by 11.8% compared to the first seven months of last year, while the expenses increased by 11.1%. But look at the numbers, see that there is no room for any enthusiasm“Added Nechita.
The Ministry of Finance informed that the execution of the general consolidated budget in the first seven months of 2025 ended with a nominal deficit of 76.44 billion lei, up 5.4 billion lei compared to the first 7 months of 2024 (71.04 billion lei). In percentage terms, the registered deficit is 4.04% of the PIB, as in the same level, at the same level.
The revenues of the general budget totaled 370.77 billion lei in the first seven months of 2025, up 11.8% compared to the previous year, while the expenses, in the amount of 447.21 billion, increased in nominal terms by 11.1%.
“The deficit has increased slightly in the first 7 months and is still at a high level. This situation emphasizes the pressing need to maintain a rigorous control over public spending. The danger of retrograde of investment rating remains a real one. We are here to ensure the stability of the country's finances and to guarantee that Romania has a predictable economic course. The rhythm of collection and to treat with responsibility the budgetary rectification. Budget disciplinestrategic investments and a healing of the economy ”, said the Minister of Finance, Alexandru Nazare.
