The political crisis and the extension of the government’s interim could have an unexpected effect on taxpayers: this summer could be the first in the last six years without significant changes in taxation.
The explanation is simple, according to the President of the Chamber of Fiscal Consultants (CCF), Dan Manolescu: in the absence of a government with full powers, the possibility of quickly adopting fiscal changes is very limited.
Dan Manolescu: There don't seem to be pressures for new tax increases
According to the CCF President, the budget execution in the first months of the year shows a significant reduction in the deficit, mainly because the state has spent less.
"In May, we had a deficit about half of last year, that is 1.75% compared to 3.35% last year. The explanation is simple: for three months, we didn't have a budget, and for two months, we don't have a government. I expect that for another two months, until September, we won't have a government. Therefore, expenses will remain at this extremely low rate of achievement. It doesn't seem like there are significant pressures for tax increases. I expect it to be a quiet summer, perhaps the first in the last six years," said Dan Manolescu, for Profit.ro.
He pointed out that the budget adjustment is supported by both previously adopted fiscal measures and the freezing of pensions and salaries in the public sector.
Manolescu explained that the current political situation reduces the chances of new fiscal changes over the summer.
"We don't have a government. And even if we have a government, we don't have an empowering law, there is no one to issue ordinances. At the same time, the Ministry of Finance has informed us that they no longer want the semi-annual reports, that balance sheet at mid-year. I think these are good news," he said.
Signs of slowing down in the economy
On the other hand, the President of the Chamber of Fiscal Consultants warns that the reduction of the deficit also has visible effects on the economy, especially on consumption.
"I've seen many empty storefronts, for rent, there are empty spaces around the city. It's clear that there's a problem. Consumption is decreasing. Everyone I've talked to in the retail sector has mentioned seeing this in sales. That's the reality. It's an adjustment we all have to live through and hope that things settle," Manolescu stated.
Romania tries to reduce the budget deficit
Romania is still in the excessive deficit procedure of the European Commission and is implementing a fiscal adjustment plan agreed with Brussels at the end of 2024.
According to the 2026 budget, the target is a deficit of 6.2% of GDP in national standard terms (cash) and 6% of GDP in the European ESA methodology.
Last year, the budget deficit was 7.65% of GDP in cash terms and 7.9% of GDP in ESA standard terms, after Romania had recorded the highest deficit in the European Union in 2024.
Last summer, the Government adopted an extensive package of tax increases and expenditure reduction measures, followed by other fiscal consolidation measures, in an attempt to bring public finances back on track as agreed with the European Commission.