The European Commission has endorsed Romania’s ambitious 7-year fiscal consolidation plan, marking a key step towards restoring economic stability. Here are the highlights:
- Deficit Reduction Strategy
Romania plans to lower its budget deficit from 7.9% of GDP in 2024 to 2.5% by 2031. The strategy involves steady annual reductions. - Spending Control Measures
The government will limit net primary expenditure growth to remain below GDP growth in real terms. In 2025, this increase is capped at 5.1%. - Increased Revenues
The plan projects government revenues rising from 29.5% of GDP in 2024 to 31.1% by 2031. Enhanced tax collection and fiscal reforms drive this growth. - Economic Growth Projections
Officials anticipate an economic growth rate of 2.5% in 2025, aligned with Romania’s potential growth trajectory. - Focus on Investments
Public investments will remain significant, reaching 7.9% of GDP in 2025. This ensures full use of EU funds under the Cohesion Policy. - Debt Management Goals
Romania commits to maintaining public debt below the 60% GDP threshold despite potential fluctuations. - Transition Plan with EU Oversight
The Commission supports Romania’s gradual fiscal corrections but stresses strict compliance with annual targets. - Pre-Election Adjustments
Romania balances pre-election budget flexibility with post-election reforms, signaling political prudence. - Alignment with EU Policies
The roadmap aligns with EU standards, promoting fiscal stability and economic resilience. - Broader Implications
This plan could serve as a model for balancing fiscal discipline with economic growth across the EU.
With this approval, Romania takes a significant step towards addressing fiscal challenges and fostering sustainable development.
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