Romania’s Fiscal Council says the delayed budget revision could still leave this year’s cash deficit at the assumed 6.25% of GDP, subject to the risks set out in its opinion. The Finance Ministry’s nine-month cash deficit was 3.8% of GDP, far below 5.35% in the same period a year earlier. The council says that result also has to be read against possible payment delays.
The opinion says the revision came late because of a major political crisis. That crisis created uncertainty, affected the economy beyond the contractionary impact of the budget correction, and likely helps explain weaker foreign direct investment. A hostile international setting added pressure: prolonged wars, a new rise in dollar-denominated energy and commodity prices, and tighter monetary policy by the Federal Reserve and the European Central Bank feeding through international financial markets. The council says the revision was the new government’s first urgency and will remove some delays in paying invoices.
It says a revision was required to update projected revenue and spending against current execution and the macroeconomic outlook. The revision is also meant to fund principal spending authorities through the end of the year, maintain medicines, medical materials and medical services, continue other programmes and facilities for pupils and people with severe disabilities, and settle arrears of local authorities, local public institutions and public hospitals in the local network.
Sums discussed publicly as payment delays fall, the council says, into several groups: possible delays on invoices already provided for under the Anghel Saligny programme; possible VAT refunds; needs that arose in execution, including health, which a revision is meant to cover; sudden obligations such as sums magistrates won in court; and the 2026 overlap of National Recovery and Resilience Plan projects, which required co-financing and shows a large lag in reimbursement by the European Commission.
The council says the political crisis made it harder for Romania to issue bonds and secure liquidity, and considerably harder to finance the deficit and refinance public debt. It calls for a balanced reading of talk about tens of billions of lei omitted from the accounts, and says Romanian budget execution is closely watched by the European Commission and rating agencies. Romania still has a credibility test to pass in 2026 to avoid a sovereign-rating downgrade. Adjustment of the deficit in 2025 and 2026 allowed Romania to avoid a downgrade by the main rating agencies, but the council says a downgrade becomes imminent if fiscal consolidation is blocked. Sovereign borrowing prices reflect markets’ view of the economy, fiscal consolidation and politics. A government with full powers was absolutely necessary, while early elections, demanded by various voices, would have prolonged the crisis and invited a downgrade.
The biggest risk to this year’s execution is absorption of European funds and reimbursement of amounts Romania can receive and that are built into the budget projection. Further risks are other external shocks and pressure from older or recent state obligations, including those toward magistrates, which the council says can be staggered to soften the budget impact. It again says the fight against tax evasion and tax optimisation is essential to raise tax revenue and continue the fiscal correction, and that budget spending can also be adjusted for that purpose.
A weaker GDP path remains possible, but in the National Commission for Strategy and Prognosis projection it is offset by prudent forecasts for the GDP deflator. The external imbalance remains high: the commission projects a current-account deficit of 7.7% of GDP in 2026, well above the 4% threshold in the European Commission’s macroeconomic imbalance procedure. On the revised budget and the first nine months, the Fiscal Council sees scope for the cash deficit to reach 6.25% of GDP, subject to the risks it lists. The Finance Ministry’s report on the cash deficit is expected to clarify the position. Romania’s commitment under the excessive deficit procedure is judged on the European ESA deficit, recorded on an accruals basis and finalised after the calendar year, so postponing payments does not change it.
For non-reimbursable structural and cohesion funds from the 2021–2027 framework, the effective absorption rate at the end of September 2026 was 30.8% for national programmes and 27.4% for national and regional programmes together, using Investment and European Projects Ministry data set against Finance Ministry figures on a comparable basis. Across the recovery plan, effective absorption excluding pre-financing was 54.9%, with 63.8% on grants and 36.4% on loans.
The 2026 budget assumed full drawdown of recovery-plan financing scheduled for the year, about 8 billion euro, of which 6.5 billion euro in grants and 1.5 billion euro in loans, matched to planned investment and reform spending. The council says receipt of payment requests 5 and 6 is decisive for covering spending already made and for the deficit target.
For the 2026 revision and the 2027 budget, recovery-plan credits need to be aligned with remaining payment tranches and with payments that can actually be made by 31 December 2026. Reference points for 2027 are permanent current spending on personnel, social assistance and interest; the budget impact of laws that take effect in 2027; payment differences on recovery-plan contracts; legal commitments for public investments already under way; and commitments under the European SAFE defence instrument. Although goods and services were revised upward, the council says strict control is needed to stay within the projected envelope, and a ceiling is set for the newly introduced SAFE-related spending category.