Significant reduction in the budget deficit
The Ministry of Finance in Bucharest reports a significant reduction in the budget deficit during the first quarter of the year.
Corina Cristea, 28.05.2026, 14:00
Romania is sending a signal of fiscal stability and budgetary discipline to international markets after significantly reducing its deficit in the first quarter of the year. Concurrently with the narrowing of the budget gap, tax revenues grew by 15%, while investments financed through European funds increased by 34%, now accounting for three-quarters of total public investments.
The announcement was made by interim Finance Minister, Alexandru Nazare, who, speaking at a profile conference, maintained that Romania is undergoing one of its most important fiscal corrections in recent years.
The Minister also emphasized that economic recovery depends on consolidating public finances and continuing investments:
“At the four-month mark in 2026, we managed to lower the deficit to 1.17% compared to 2.9% last year, meaning the deficit decreased by 32 billion, which is a significant correction, a large-scale correction, no longer just a phase correction. And the arguments invoked for the execution of previous months, to the effect that there was no budget or that there were no expenditures, no longer apply now. It has helped us tremendously that the four-month execution looks this way. First of all, it helps us because it validates the annual deficit target. It helps us because, against a backdrop of major political turbulence, the fiscal trajectory remains serious and solid, which has mattered enormously for rating agencies in recent weeks”.
The imbalances accumulated in the economy cannot be corrected quickly, Alexandru Nazare explains, further noting that sustained investments through the National Recovery and Resilience Plan (PNRR) and other European funds are key to maintaining economic growth and avoiding the need for hasty new fiscal measures.
At the same time, the government is trying to operationalize a new wave of support schemes for the economy, including strategic investments exceeding 200 million Euro, programs for the manufacturing industry, technology, research and support for Romanians in the diaspora who wish to invest in the country.
“The four-month execution confirms Romania’s entry onto a clear path of fiscal consolidation, representing one of the most consistent budgetary corrections in the European Union during this period. This comes as a result of a major effort. However, the current context continues to demand caution and strictness in the management of public funds”, the budget execution report presented by the Ministry of Finance reads.
Fiscal consolidation is taking place within an economy characterized by weaker domestic demand and high inflation, the document further notes, which requires strict control over current expenditures and the accelerated absorption of European funds.
“This is the balance we must maintain: fiscal discipline, accelerated absorption of European funds, and the protection of projects that support development. For the year 2026, the objective remains to reduce the budget deficit to 6.2% of GDP in cash terms, in line with commitments assumed within the European framework. Maintaining this trajectory is crucial for reducing macroeconomic vulnerabilities, preserving investor confidence, and creating the necessary space for investments”, the line minister explained. (VP)
