Budget deficit rises to 3.68% of GDP after first six months

The consolidated budget deficit rose to 3.68% of GDP after the first six months of this year, from 3.39% at the end of May, reaching RON 69.80 billion, according to data published Monday by the Ministry of Finance.Last year, the budget deficit was RON 63.67 billion in the same period, or 3.62% of GDP.According to the Ministry of Finance, total revenues amounted to RON 310.52 billion in the first six months of 2025, recording a 12.7% increase (year-on-year), supported both by the increase in current revenues - mainly income tax and insurance contributions - and by the evolution of revenues from European funds. Expressed as a share of GDP, total revenues increased by 0.74 percentage points (+0.5 pp in the case of current revenues - mainly income tax and insurance contributions - and +0.24 pp in the case of European funds).Revenues from income and payroll taxes reached RON 30.34 billion, marking a 21.8% year-on-year increase. This growth was largely driven by an 84.8% surge in dividend tax revenues, following the distribution of dividends in 2024 under the new 8% tax rate. Salary tax revenues also saw robust growth of 22%, outpacing the 11.8% rise in the national wage fund. This increase reflects the impact of removing tax exemptions previously granted to employees in sectors such as construction, agriculture, food industry, and IT.Profit tax revenues totaled RON 17.23 billion, up 10.9% (year-on-year), supported by higher profit tax revenues from economic agents.Net VAT revenues amounted to RON 59.27 billion in the first half of 2025, reflecting a 3.8% year-on-year increase. This growth was influenced by a 9.7% rise in VAT refunds -RON 16.41 billion compared to RON 14.96 billion in the same period of 2024 - alongside a high base effect and more moderate turnover growth. Additionally, the accelerated revenue collection in June was driven by a favorable base effect, stemming from a low tax base in June 2024.Revenues from excise duties reached RON 21.96 billion, up 11.9% year-on-year, supported by strong gains in excise collections from energy products (+13.6%) and tobacco products (+11.6%). Monthly trends in excise revenue tend to show volatility, largely influenced by operators' practices of storing excise goods in bonded warehouses.On the expenditure side, consolidated general government spending rose to RON 380.32 billion, an increase of 12.1% in nominal terms compared to the same period last year. As a share of GDP, expenditures grew by 0.8 percentage points - rising from 19.3% in 2024 to 20.1% in 2025.The budget for the current year is based on economic growth of 2.5% and a budget deficit of 7% of GDP. Last year, the deficit was 9.3% of GDP.