The Economy of Romania
Public Finances and the Deficit
Romania runs one of the EU's largest budget deficits, and tax collection is low, forcing austerity and pressure to reform.
A strained budget.
Deficit
Around 9 per cent of GDP in 2024, well above EU limits.
Low revenue
Tax collection is among the lowest in the EU, with a large VAT gap.
Spending
Pensions and public wages are large, and infrastructure needs are big.
Consequences
Credit rating agencies warn of downgrades to junk.
A missing tax
A large amount of VAT goes uncollected due to evasion.
Assuming deficits fix themselves
Reform is needed.
Key takeaways
- The deficit is large.
- Tax collection is low.
- Spending pressures are high.
- Ratings are at risk.
No recording for this one yet - EconReader can read it aloud for you.