Romania will struggle to reduce deficits

Significance The budget deficit is now expected to reach 7% of GDP this year. Earlier this week, Prime Minister Marcel Ciolacu claimed that Brussels approved Bucharest’s plan to reduce the deficit to under 3% over a longer, seven-year period. Impacts Reaching economic growth and disinflation targets in the second half of 2024 will be challenging. The release of EU funds under the RRP may face further delays. Romania’s credit rating could deteriorate into speculative grade if the macroeconomic outlook weakens.