Romania's budget shortfall escalates beyond 4% during the initial seven months of 2025
Romania's consolidated budget deficit for the first seven months of 2025 has increased to 4.04% of the country's GDP, up from 3.68% at the end of June. This rise in the deficit has been driven by various factors, as detailed in the latest financial reports.
Total revenues for the same period amounted to RON 370.77 billion, an increase of 11.8% (year-on-year). Notably, collections from income and salary tax totaled RON 35.31 billion, up 21.3% from the previous year. The increase in income and salary tax collections was due to a significant advance in dividend tax collections (+84.0%).
On the expenditure side, personnel expenses amounted to RON 99.72 billion (approximately EUR 20 billion), up 7.9% compared to the first seven months of the previous year. Social assistance expenditures were RON 147.54 billion, up 14.7%, while interest expenditures were RON 31.71 billion.
Expenditures on goods and services were RON 53.59 billion, and subsidy expenditures were RON 7.66 billion. It's worth mentioning that insurance contributions increased by 10.8% to RON 121.07 billion.
Net VAT collections totaled RON 69.99 billion, marking an increase of 5.7%. Non-fiscal revenues reached RON 34.71 billion, an increase of 8.9%. Excise revenues amounted to RON 26.67 billion, up 13.2%.
Profit tax collections totaled RON 26.17 billion, up 11.1% (year-on-year). Amounts reimbursed by the European Union for payments made and donations totaled RON 28.62 billion, up 33.6%.
The consolidated general budget expenditures for the first seven months of 2025 increased by 11.1% compared to the same period of the previous year, totaling RON 447.21 billion. As a percentage of GDP, expenditures in 2025 recorded an increase of 0.7% compared to the same period of 2024.
The deficit-to-GDP ratio reached 8.65% based on the estimated 2024 GDP. This increase in the deficit-to-GDP ratio has raised concerns, and as a result, an International Monetary Fund (IMF) mission, led by Joong Shik Kang, will visit Bucharest between September 3-12 to analyze the recent developments of the Romanian economy.
Despite the rising budget deficit, there are positive signs in the Romanian economy. The wage bill in the economy increased by 11.5%, but salary tax collections rose by 21.4%, indicating a healthier tax collection environment. The search results do not contain information about the name of the head of the IMF mission visiting Bucharest between September 3 and 12, 2025.
