The budget deficit in the first four months decreased by 32 billion lei compared to last year. Good news, but it comes with a caveat.
A deficit of 23.95 billion lei – compared to 56 billion in the same period last year – represents a consistent arithmetical reduction and a “change in trajectory” that Romania has not registered in recent years, the Finance statement says
But before celebrating, it's worth understanding what really happened.
What worked
State revenues increased by 12% compared to the first four months of 2025. VAT – the most visible tax in the pocket of any Romanian – brought in 22% more. Social contributions increased by 9%. Payroll tax, with almost 22%.
An important part of this increase comes from the fiscal measures adopted in 2025 – the higher VAT rates, the expansion of the tax base. It is not about an economy that grows faster (we are in a technical recession, with the economy in decline); it is mostly about higher taxes that produce more money for the budget.
On the expenditure side, discipline held where it could: salaries in the public sector fell by 1.9 billion lei compared to last year, and social assistance was slightly compressed.
What didn't work – or can't be ignored
Interest on the public debt rose by 3.26 billion lei compared to the same period in 2025. These are not discretionary expenses – they are the automatic consequence of the loans accumulated during the years of high deficit. The bigger the debt, the more expensive it is to pay it off.
And domestic consumption is weakening. In an economy where people are buying less, VAT may not increase at the same rate. The fiscal engine that helped in 2026 may cool.
About investments — a detail that matters
Public investments exceeded 31 billion lei in the first four months. An impressive number, which the authorities emphasize with pride. But three quarters of these investments come from European funds and PNRR – not from Romania's own resources.
This is not necessarily a bad thing – the absorption of European funds is exactly what should happen. Payments from these sources increased by 34% compared to last year, which shows that Romania is accelerating in the right direction. But it depends massively on a calendar that we don't fully control: PNRR has fixed deadlines. If we miss them, we lose money that cannot be recovered.
“However, the consolidation remains fragile and highly dependent on political stability, the absorption of European funds and maintaining the confidence of the financial markets”, conclude the authors of the statement.
