Romania's Budget Dilemma: Balancing Deficit and Growth

Romania's President-elect Nicusor Dan targets a budget deficit of 7.5% of GDP by 2025, avoiding tax increases. With 2024's deficit at 9.3%, EU fund access and sovereign ratings are at risk. Dan must nominate a prime minister to address these challenges within a centrist ruling coalition.

Romania's President-elect, Nicusor Dan, has set an 'optimistic, realistic' budget deficit target of 7.5% of GDP by 2025, ruling out tax increases in initial budget talks for 2025 and 2026.

The 2024 deficit stood at 9.3%, risking Romania's access to EU funds and potential downgrades of its sovereign rating. The defeat of a eurosceptic opponent has placed Dan at the forefront of forming a government to tackle these financial challenges.

With economic growth slowing, and the European Commission predicting high deficits, Dan must forge a coalition capable of economic reform without resorting to tax hikes, amid pressure from far-right factions resistant to budget cuts.

(With inputs from agencies.)