Romania cuts budget deficit by more than half in Q1 2026

Business Forum

29 April, 2026 at 8:00 AM

Romania's consolidated general budget recorded a deficit of €4.2 billion in the first quarter of 2026, representing 1.03% of GDP, compared to a deficit of €8.7 billion (2.28% of GDP) in the same period of 2025 over revenue growth and expenditure control.

The Q1 results confirm the fiscal consolidation commitment, achieving a reduction in the deficit while maintaining a high level of public investment, supported primarily by European funds, according to the Ministry of Finance.

Total revenues reached €31.7 billion in the first quarter of 2026, marking a 12.3% increase compared to the same period in 2025. Net VAT collections reached €6.7 billion, up 17.7%, driven by VAT rate changes under Law 141/2025. VAT refunds increased to €2.1 billion from €1.7 billion in Q1 2025. Income and salary taxes generated €3.6 billion, a 19% increase, supported by a 53% rise in dividend taxes and the elimination of tax facilities in construction, agriculture, food industry and IT sectors.

Total expenditures amounted to €35.9 billion, recording a 2.8% nominal decrease compared to the same period last year. As a share of GDP, expenditures fell from 9.7% to 8.8%. Personnel expenses decreased by €256 million to €8.2 billion due to limits on bonuses and salary expenditures. Investment expenditures, including capital expenditures and development programmes, totalled €4.3 billion, with 74.92% representing payments for projects financed from EU funds and the National Recovery and Resilience Plan (PNRR).

Social assistance expenditures totalled €12.7 billion, down 0.2% compared to the same period last year, taking into account measures under Law 141/2025. Interest expenses reached €2.7 billion, maintaining their share of 0.7% of GDP.

Romania cuts budget deficit in half in first two months of 2026

Romania's consolidated general budget recorded a deficit of RON 14.23 billion (€2.86 billion) - 0.70% of GDP, in the first two months of 2026, half the RON 30.24 billion deficit (€2.86 billion) - 1.58% of GDP from the same period in 2025.

Economy

CFA Indicator: Romanian confidence index drops as inflation fears persist

The Macroeconomic Confidence Indicator compiled by CFA Romania Association fell by 7.3 points in October 2025, reflecting continued economic uncertainty in the country.

Finance

Romania's Fidelis bonds attract over €260 million in November

Romania's tenth Fidelis government bond issuance of 2025 attracted subscriptions worth over RON 1.3 billion lei (€260 million) during its seven-day offering period from November 7-14, demonstrating continued strong investor interest in this savings instrument.

Economy

Romanian PM: No VAT or tax hikes next year, spending cuts are key

The government has committed to a stable tax environment for the next fiscal year, officially confirming that the VAT will not be increased.

Finance

Romania secures EU approval to replace VAT gap target in PNRR

Romania has secured the European Commission's agreement to replace the National Recovery and Resilience Plan (PNRR) milestone concerning the reduction of the VAT gap.

Real estate

Romanian property sales drop 1% after VAT hike

Property transactions in Romania fell by nearly 1% in the first two months after the VAT increase compared to August-September 2024, but rose over 10% compared to May-June transactions, according to official data from the National Agency for Cadastre and Real Estate Advertising (ANCPI).