Economic consultant Adrian Negrescu warns that 2027 will not bring the expected fiscal relaxation, but could be a second year of austerity, even harsher than 2026. In the context of pressures to reduce the deficit and the risk of Romania being downgraded to „junk” status, he anticipates possible freezes on salaries and pensions, elimination of certain tax benefits, higher taxes, and increased excise duties.
Negrescu believes that President Nicușor Dan’s speech, which brought back into discussion even the scenario of an agreement with the IMF, is preparing public opinion for new tough measures.
"The hard part is coming, structural reforms, which no government has undertaken so far. In January, February, and March, rating agencies will decide whether Romania remains in the investment grade zone or falls to junk. A downgrade would mean higher interest rates for the state, but also for every Romanian with a bank loan.
The president's warning must be taken seriously: 2027 will not be a year of relaxation but the second year of austerity, probably more painful than the first. As I have said repeatedly, the alternative is an agreement with the IMF," wrote Adrian Negrescu on Wednesday on his Facebook page.
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It cannot be done without freezes on salaries and pensions, higher taxes, and increased excise duties
In his opinion, reducing the budget deficit in 2027 could require new fiscal and budgetary measures, such as freezes on salaries and pensions and increased excise duties, despite the Government’s promises to avoid additional taxes.
"The Government promises there will be no new taxes in 2027, but the equation cannot be balanced only by cutting expenses, especially with interest payments over 70 billion lei next year and without the money from the RRP.
Most likely, we will have a combination: freezes on salaries and pensions, elimination of some tax benefits, higher taxes, and increased excise duties. All will be presented as adjustments, not new taxes. Beyond these speculations, what is certain is that Romania demonstrated in 2026 that it can reduce the deficit, and the European Commission confirmed that we took effective measures. The problem is that we have already used the easy instruments: VAT increased, local taxes increased, public sector salaries are frozen," stated the economic consultant.
Did mathematician Nicușor Dan make a calculation error? No, he presented the risk scenario
He pointed out that President Nicușor Dan spoke Tuesday evening about a budget deficit of 150 billion lei for 2026, about 20 billion lei above the official target of the Ministry of Finance, which is 130.3 billion lei, equivalent to 6.2% of GDP.
"The difference is not a technical detail. It shows how fragile the deficit target remains and how much it depends on money that has not yet entered the state's accounts. The paradox is that the figures presented by the president, revenues of 730 billion and expenses of 860 billion, lead to a deficit of 130 billion, exactly the Finance Ministry’s target. The 150 billion does not come from his own calculation," explained Negrescu.
The economic consultant believes the difference between the two deficit estimates could be explained by a risk scenario.
"The most plausible explanation is that the president spoke about the risk scenario, not the official one.
The 130 billion target is based on the last installments from the RRP, over 4 billion euros in grants, approximately 1% of GDP, or over 20 billion lei.
The European Commission is still evaluating them. If the money does not arrive by December 31, the deficit automatically jumps to 150 billion. Practically, the difference between the two figures is the difference between a year in which everything goes well and one in which Brussels delays or cuts payments," he argued.
The austerity effort does not reduce the deficit, it only pays the cost of old debts
Adrian Negrescu also drew attention to the structure of the budget deficit, especially interest expenses. According to him, in the third quarter the deficit was higher than last year, and the interest bill exploded.
"What is certain is that the budget execution after nine months shows a deficit of 78.3 billion lei, or 3.81% of GDP, compared to 5.31% in the same period last year. On paper, consolidation works.
But in the third quarter, the deficit was higher than last year, and the interest bill exploded. The most worrying element is not the deficit figure but its structure. In just nine months we paid over 50 billion lei in interest, nearly 11 billion more than last year. Just in the third quarter, interest payments increased by 44%.
This means that an increasingly large part of the austerity effort does not reduce the deficit but only pays the cost of old debts", Negrescu specified.
The president is preparing public opinion for tough measures
The economic consultant pointed out that the state has increased VAT, excise duties, and property taxes, and the money mostly goes to creditors.
"The last quarter is traditionally the most expensive of the year. Beyond the size of the deficit, in the summer, the president firmly stated that there would be no further tax increases beyond those already being implemented. Last night, when asked about prospects, he avoided the subject and shifted the discussion to expenses: he said it is very hard to believe that you can drastically reduce the deficit without touching salaries and pensions.
The fact that the president no longer repeated the guarantee that taxes will not increase says more than any statement. The discourse has changed: we no longer talk about no new taxes, but about credibility in front of the markets, the risk of rating, and the IMF. When a head of state puts the IMF scenario on the table and says that salaries and pensions cannot remain outside the discussion, he is preparing public opinion for tough measures," added Negrescu.