Budget deficit of 3.39 pct of GDP after first five months of 2025

 The budget deficit stood at 3.39% of GDP after the first five months of 2025, compared to 3.41% of GDP in the same period last year, according to data published on Friday by the Finance Ministry."The execution of the consolidated general budget in the first five months of 2025 ended with a deficit of RON 64.23 billion, or 3.39% of GDP compared to the deficit of RON 60.10 billion, or 3.41% of GDP for the first five months of 2024," reads the document published by the MF.After the first four months of 2025, the budget deficit stood at 2.95% of GDP, or RON 55.97 billion.The total revenues amounted to RON 256 billion in the first five months of 2025, registering an increase of 13.6% (year-over-year), supported by both the increase in current revenues - mainly wage and income taxes, insurance contributions, excise duties - and the evolution of revenues from European funds. Expressed as a share in GDP, the total revenues increased by 0.7 percentage points (+0.5 pp in the case of current revenue and +0.2 pp for European funds).The revenues from the payroll and income tax totaled RON 25.71 billion, registering an increase of 21.7% (year-over-year), generated by the significant advance of the revenues from the tax on dividends (+86.3%), on account of the dividends distributed in 2024, with the retention of the 8% tax rate. At the same time, a positive dynamics was also recorded in the case of receipts from payroll tax (21.3%) - above the dynamics of the wage fund in the economy (12.1%), the evolution of this category of revenues being influenced by the elimination of tax facilities granted to employees in the construction, agricultural, food industry and computer software creation activities.Insurance contributions amounted to RON 87.17 billion, up by 11.5% (year-over-year), below the dynamics of the wage fund in the economy. The more tempered evolution of these receipts is partly explained by a higher actual transfer to the second pension pillar compared to the first five months of last year (RON 9.0 billion in January-May 2025 compared to RON 6.9 billion in January-May 2024). However, in May, there was a higher dynamics in receipts from contributions, as a result of the payments made for the Single Declaration (D 212).Corporate income tax receipts amounted to RON 10.50 billion, registering an increase of 4.1% (year-over-year), supported by the advance in corporate income tax revenues from economic agents.Net VAT receipts amounted to RON 48.99 billion, up by 2.3% (year-over-year). The evolution of these receipts can be explained both by the increase in VAT refunds (+8.4%), compared to the level refunded in the same period last year (RON 13.98 billion in January-May 2025, compared to RON 12.90 billion in January-May 2024), and by a high base effect and a more moderate turnover dynamics.Revenue from excise duties amounted to RON 18.51 billion, registering an increase of 17.1% (year-over-year), supported by the positive evolution of excise duties on tobacco products (19.3%) and excise duties on energy products (+16.8%). The monthly evolution of excise duties revenue is generally more volatile, generated by the policy of economic operators of fiscal warehousing of excise products.The non-tax revenues amounted to RON 21.01 billion, up by 19.3%, as the March receipts include RON 1.6 billion representing state aid revenues recovered from the Romanian rail freight company CFR Marfa.The amounts reimbursed by the European Union on account of payments made and donations totaled RON 21.98 billion, an increase of 32.8% (year-over-year).On the other hand, the expenditure of the consolidated general budget in the amount of RON 320.23 billion increased in nominal terms by 12.2% compared to the same period of the previous year. Expressed as a percentage of GDP, expenditure in 2025 increased by 0.7 percentage points compared to the same period of 2024, from 16.2% of GDP to 16.9% of GDP.Personnel expenditure amounted to RON 71.07 billion, up by 11.3% compared to the same period of the previous year. Expressed as a share in GDP, personnel expenditure represented 3.8% of GDP, 0.2 percentage points higher than in the same period of the previous year.Expenditure on goods and services amounted to RON 38.30 billion, up by 0.8% compared to the same period of the previous year. An increase is reflected in the budget of the Single National Fund for Social Health Insurance of 4.1% for the reimbursement of medicines with and without personal contribution and medicines used in national health programs.In addition, interest expenditure amounted to RON 22.86 billion, RON 6.86 billion higher than in the same period of the previous year.As for social assistance expenditures, they amounted to RON 106.21 billion, up by 15.2% compared to the same period of the previous year. "The evolution of social assistance expenditures was mainly influenced by the implementation of the measures for recalculation of pensions in the public system as of September 1, 2024, in accordance with the provisions of Law no. 360/2023 of November 29, 2023 on the public pension system. The social assistance expenditures were also influenced by the payments from the state budget for the compensation of invoices related to the consumption of electricity and natural gas, respectively for the 5 months of 2025, amounted to RON 1.70 billion," the MF press release reads.Expenditure on subsidies exceeded RON 5.76 billion, mainly, this amount representing subsidies for passenger transport and support for agricultural producers, as well as for the compensation scheme for the consumption of electricity and natural gas by non-household consumers (RON 544.58 million).Other expenditures amounted to RON 7.73 billion, representing mainly scholarships for pupils and students, support to religious denominations, other civil damages and amounts related to payment titles issued by the National Authority for Property Restitution.According to the cited source, the expenditure on projects financed from non-reimbursable external funds (including grants from the European Union related to agriculture) amounted to RON 25.77 billion, up by 23.9% compared to the same period of 2024.Last but not least, investment expenditures, which include capital expenditures, as well as those related to development programs financed from domestic and foreign sources, amounted to RON 40.57 billion, 7.33% higher than in the same period of the previous year, when they amounted to RON 37.80 billion.