Opinion: Gov't deficit could widen to at most 6pct of GDP in 2026

  Romania could face a government deficit of no more than 6% of GDP in 2026 after the measures already approved and the control of spending, Nicolaie Alexandru-Chidesciuc, managing director at JP Morgan, said on Monday at the CFA Forecast Dinner."I think it is realistic to expect a deficit of maximum 6% of GDP in 2026. In 2025 it already outperformed targets. To me, at least, it wasn't necessarily a surprise. There are already measures that have been approved in Parliament, they have also passed the Constitutional Court, which in principle should be enough to reach the target of 6% of GDP. We may even be slightly below 6% of GDP. It also depends on the 2026 budget. I hope there will be no big surprise there, but you can never know, because that is another problem and it is also related to Romania's credibility and the cost of borrowing," said Chidesciuc.As for 2027, the economist showed that the outlook is more uncertain, in the absence of already defined measures."The year 2027 is a little more complicated, because there are no measures in relation to it. There may be attempts, but we have nothing concrete. I'm optimistic, but I don't know if it's realistic. The deficit forecast is below 5% for 2027, taking into account both the receipts and outlays sides. On the receipt side, it is mainly about improving collection. It's something that Romania has not managed to do in the last 20 years or so. However, I think something will happen next year. Why? Because I see much more effort in that direction from the current government. And apart from that, the imbalances or gaps between what can be collected related to the level of taxation and what is actually collected have widened lately. There is an effort in that direction, on the receipts side."The economist is expecting the control of outlays to continue next year."On the outlays side, after two years in which pay and pensions were frozen, 2025 and 2026, I don't think it's reasonable to believe that they will remain frozen in 2027 - but I think there will be growth below nominal GDP, which would be enough to continue the control of spending. What we saw in this adjustment, especially in 2025, when the deficit surprised downwards, happened based on two factors. One is the strict control of spending, which was strictly indeed, and with this Government it will probably continue. The second factor was VAT. There are people who were against the VAT increase, but when we look at the revenue side, there is not much else to explain the over-performance."The statements were made during the 2026 edition of the CFA Forecast Dinner, an event that marks 20 years since the launch in Romania and 25 years of activity of the CFA Romania Association, a CFA Institute affiliate, themed "Romania's strategic direction for the next 10 years."Also, a macroeconomic forecasting session was held during the event where the participants presented key estimates of the developments in Romania's main economic indicators. Thus, 46% voted for economic growth between 1% and 1.5% in 2026. As for the inflation rate, 38% forecast that it will be between 5% and 6% next year.