Financial plan by ING leads to decreased budget and current account deficits for Romania, but at the expense of economic growth
Romania's Debt Consolidation Plan: A Path Towards Deficit Reduction and Economic Growth
Romania's government has unveiled a debt consolidation plan, designed to reduce the country's government deficit and moderate the current account deficit, while also stimulating economic growth. The plan, initiated by Finance Minister Alexandru Nazare, aims to achieve deficit targets of 7.5% this year and 6.4% in 2026.
According to the plan, the government deficit is expected to be reduced from the record 8.7% of GDP (cash terms) in 2024 to 7.5% in 2025 and 6.4% in 2026. This reduction is expected to be achieved through a series of tightening measures, including spending cuts and tax increases.
The debt consolidation plan is also projected to result in a meagre 0.3% GDP growth in 2025, but this is expected to strengthen to 1.7% in 2026. This growth is anticipated to be driven by increased domestic and foreign investment, as well as improved consumer confidence.
In addition to the deficit reduction and economic growth targets, the plan also aims to moderate the current account deficit. The current account deficit is projected to be between 7.5-8.0% in 2025 and 6.5-7.0% in 2026. This moderation is expected to contribute to a more stable exchange rate and improved balance of payments.
The debt consolidation plan is expected to help the government achieve its deficit targets of 7.5% in 2025 and 6.4% in 2026 from the record 8.7% of GDP in 2024 (cash terms). The plan is also expected to strengthen the GDP growth from 0.3% in 2025 to 1.7% in 2026.
The implementation of the debt consolidation plan is a significant step towards ensuring the long-term sustainability of Romania's economy. The plan is available for members of Romania Insider or for signed-in users. For more information, visit Romania Insider.
Read also:
- Strategizing the Integration of Digital Menus as a Core Element in Business Operations
- Financial Actions of BlockDAG Following Inter and Borussia Agreements: Anticipating Future Steps
- International powers, including France, Germany, and the UK, advocate for the reinstatement of sanctions against Iran.
- Companies urged to combat employee resignation crisis, as per findings from the Addeco Group
