According to the data of the Ministry of Finance of Romania, in the first five months of this year, the budget deficit amounted to 2.32% of GDP. This despite the fact that last year in May it was 1.48% of GDP.

Note that at the end of the year there should be a deficit of 4.4% of GDP, that is, less than 5.75%.

It remains to be seen how the first correction of 2023, expected in August, will play out. The Ministry of Finance and the Government must take action.

In value terms, the budget deficit at the level of May is 36.9 billion lei (in 2022, for the same period, it was 20.9 billion lei).

According to the Ministry of Finance, the reason for the increase in the deficit is mainly:

• an increase in the volume of investments by 55.1% more compared to the same period of the previous year, compensation of bills related to the consumption of household and non-household electricity and natural gas in the amount of 4.16 billion lei

• a larger amount of payments for drug goods and services

• slowing down of revenue collection

• impact of implementation of the second stage of the Support Program for Romania

Total revenues for the first five months of the current year amounted to 197.54 billion lei, an increase of 10.4% compared to the same period last year.

Their change was mainly influenced by the dynamics of income from wages and income tax, insurance contributions and European funds, while income from excise duties and VAT registered a more moderate advance (which is explained by the high base effect associated with the previous year).

Expenditures of the consolidated general budget in the amount of 234.45 billion lei increased in nominal terms by 17.3% compared to the same period last year.

Expressed as a percentage of gross domestic product, spending in the first five months of 2023 increased by 0.5 percentage points compared to the same period in 2022, from 14.2% of GDP to 14.7% of GDP.