Romania's national budget deficit widens to 4.54pct of GDP eight months into 2025

The deficit in Romania's aggregate national budget widened to 4.54% in the first eight months of 2025, from 4.04% at the end of July, reaching RON 86.36 billion, according to data published on Monday by the Ministry of Finance (MF).In 2024, the budget deficit was RON 80.87 billion in the same period, which was 4.59% of GDP.Total receipts amounted to RON 420.11 billion in the first eight months of 2025, up 11.8% (year-on-year).As a share of GDP, total receipts increased by 0.74% and by 0.38% in the case of current revenues - mainly tax on wages and income, insurance contributions and excise duties - and by 0.36% in European funds.Revenues from payroll and income tax totalled RON 39.63 billion, up 20.5% (year-on-year), on a significant advance in dividend tax revenues (+77.3%), on account of dividends distributed in 2024, with the withholding tax rate of 8%.At the same time, a positive dynamic was also recorded in the case of payroll tax receipts (21%) - above the dynamics of the wage stock (11%), with the evolution of this category of receipts being influenced by the elimination of tax incentives to employees in the construction, agricultural, food industry and software creation activities.Insurance contributions amounted to RON 137.73 billion, up 10.3% (year-on-year), below that of the salary stock. Development in these receipts was also influenced by an effective transfer to Pillar II of pensions higher than that achieved in the first eight months of 2024 (RON 14.8 billion in January - August 2025 as against RON 11.6 billion in January - August 2024).According to MF, the receipts from the corporate tax amounted to RON 27.09 billion, up 11.7% (year-on-year), backed by higher revenues from the corporate tax on business operators.Net Value Added Tax (VAT) receipts amounted to RON 82.55 billion, marking an increase of 6.9% (year-on-year). "Development in these receipts can be explained both by the advance of VAT refunds (+8%), compared with the level refunded in the same period last year (RON 22.1 billion in January - August 2025 as against RON 20.5 billion in January-August 2024), and by a higher base effect.Excise revenues amounted to RON 32.36 billion, up 15.9% (year-on-year) on positive developments in the receipts from excise duties on tobacco products (18.5%) and excise duties on energy products (+15.4%). The monthly development of excise receipts generally presents a higher volatility, determined by the policy of fiscal warehouse operators in the case of excise products.Also, non-tax revenues amounted to RON 37.61 billion, up 4.6%, while the March revenues include RON 1.6 billion in state aid revenues recovered from Carpatica Feroviar Romania - S.A.The amounts reimbursed by the European Union on account of payments made and donations totalled RON 31.49 billion, up 37.3% (year-on-year).As for the outlays in the consolidated national budget, they amounted to RON 506.47 billion, an increase in nominal terms by 10.9% from the same period of the previous year. As a percentage of the Gross Domestic Product, 2025 expenditures so far increased by 0.7% as against the same period of 2024, from 25.9% of GDP to 26.6% of GDP.Staff expenses amounted to RON 113.3 billion, up 6.9% from the same period of the previous year. As a share of GDP, staff expenses levelled out at 6% of GDP.Expenditures on goods and services amounted to RON 63.32 billion lei, up 4% from the same period of the previous year. An increase is reflected in the budget of the Single National Health Insurance Fund of 8.6% for the reimbursement of medicines with and without co-payments and medicines used in national health programmes.Interest expenses amounted to RON 33.18 billion, up RON 10.33 billion from the same period of the previous year.Also, social security outlays were RON 167.4 billion, up 13.9% from the same period of the previous year. According to MF, social security outlays were mainly influenced by the implementation of recalculated state pensions starting with September 1, 2024, in accordance with the provisions of Law 360/2023 of November 29, 2023 on the state pension system. "Social assistance expenses were also influenced by the payments from the national budget to offset the bills related to the consumption of electricity and natural gas for the first eight months of 2025, to the tune of RON 2.4 billion lei."In the first eight months of 2025, public subsidies amounted to RON 8.54 billion, mainly for passenger transport and support for agricultural producers, as well as for the compensation scheme for the consumption of electricity and natural gas of non-household consumers (RON 856.45 million).Other expenses amounted to RON 12 billion, mainly representing scholarships for pupils and students, support for religious denominations, other civil indemnities and amounts related to payment deeds issued by the National Authority for Property Restitution.Expenditures on projects financed from non-repayable external funds (including subsidies from the European Union related to agriculture) amounted to RON 38.9 billion, up 25.89% from the same period of 2024.As for investment expenditures, which include capital expenditures, as well as those related to development programmes funded from domestic and external sources, they amounted to RON 71.95 billion, 10.65% higher than in the same period of the previous year, when they were standing at RON 65.03 billion.The budget for the current year is built on an economic growth of 2.5% and a budget deficit of 7% of GDP. Prime Minister Ilie Bolojan said on Wednesday that Romania has agreed with the European Commission to close the year on a deficit of 8.4% of GDP.