State budget, adopted after tough PSD-PNL negotiations

On Friday, the plenary session of Parliament approved, three months late, the state budget for 2026, a legislative act that was heavily delayed due to disputes within the governing coalition, between PSD and PNL, regarding the social package proposed by the social-democratic political party, a package that involves funding of one billion lei. After three days of fierce disputes in the reunited parliamentary committees, the liberals and social-democrats reached a consensus and the social package remained in the state budget, but magistrates who won lawsuits against the state regarding the recovery of salary differences will not receive their money this year, but only in 2027.

The state budget law for 2026 was adopted by Parliament with 319 votes "for", 104 votes "against" and one abstention. At the end of the vote in Parliament, Prime Minister Ilie Bolojan declared: "I thank all the parliamentarians who voted for the budget. A budget that provides for a fair approach towards citizens. On this occasion, I tell Romanians that all the reforms made so far, the cuts in spending in institutions are reflected in this budget. No one will be able to throw away the effort made by Romanians in the recent period and squander public finances. We have the necessary strength to set things right and put Romania on a fair and realistic footing. Romania proves, by maintaining the deficit target of 6.2%, that it is a fair partner. I also address the citizens of Romania, whom I thank for the efforts and understanding they have shown in the recent period and I assure them that the budget ensures investments for the continuation of public works, for the payment of salaries and pensions." For his part, PSD leader Sorin Grindeanu said that the way the negotiations were conducted would weigh in the internal consultations on whether the Social Democrats would leave or remain in government, stating: "We are talking about an intensification that you have seen since I announced the solidarity package, so that, in the end, a solution could be reached. But this could have been unblocked much earlier. Of course, the budget matters when my colleagues vote, but other things also matter: the government's activity in all these months, the way the government acted, the way the PSD proposals were taken into account. Rest assured that we will say both the plus points and the minus points."

AUR leader George Simion said that the parliamentary opposition will challenge the state budget law at the Constitutional Court of Romania because, according to AUR, POT and SOS representatives, the Bologna government is irresponsible, does not protect vulnerable people and does not direct investments towards "projects that generate prosperity”.

George Simion stated: "We have not seen responsibility from the government and we have seen all sorts of issues disguised as sustainable investments. I do not think that we need stadiums in different places in the country now. We need to protect vulnerable people and we need to invest in projects that generate prosperity, such as energy production and storage. We see the current global crisis at the European Union level. We hope that those green certificates will be abandoned. We see that Romania is outside the European and international discussion. Our duty is to fight for Romanians. The current coalition only scares the stock markets, scares the rating agencies”.

The state budget for 2026 is built on a macroeconomic framework that estimates an economic growth of 1%, a gross domestic product in current prices of 2,045.2 billion lei, a deflator of 6.1%, a 5.5% increase in the average net monthly salary and an average annual inflation rate of 6.5%, in a budgetary construction presented by the Executive as one simultaneously oriented towards consolidating the sustainability of public finances, maintaining a sustained pace of investments, fiscal predictability, supporting SMEs and the business environment and ensuring long-term economic stability.

Total revenues of the general consolidated budget are estimated at 736.5 billion lei, equivalent to 36% of GDP, of which current revenues amount to 636.3 billion lei, while expenditures are projected at 864.3 billion lei, i.e. 42.3% of GDP, resulting in a budget deficit of 127.7 billion lei, respectively 6.2% of GDP, a target that would decrease to 5.1% of GDP in 2027. In this context, tax revenues are estimated to increase from 323 billion lei, respectively 16.9% of GDP, to 357.6 billion lei, i.e. 17.5% of GDP, and social security contributions from 208 billion lei, respectively 10.9% of GDP, to 226.4 billion lei, i.e. 11.1% of GDP, on the back of improved collection and stabilization of the tax base. taxation.

Personnel expenses are estimated at 168.3 billion lei, or 8.2% of GDP, compared to 167.7 billion lei and 8.8% of GDP in 2025, while spending on goods and services reaches 105.3 billion lei, or 5.2% of GDP, from 100.6 billion lei and 5.3% of GDP last year. Social assistance spending amounts to 249.2 billion lei, or 12.2% of GDP, compared to 250.9 billion lei and 13.1% of GDP in 2025. In contrast, interest spending increases sharply, by approximately 10.3 billion lei, from 50.5 billion lei to 60.8 billion lei, reaching about 3% of GDP, amid the costs of financing the deficits accumulated in previous years and the maintenance of high interest rates on financial markets.

The central pillar of the 2026 budget, however, is investments, for which a total volume of approximately 164 billion lei is foreseen, almost 25.8 billion lei more than in 2025, which raises their share to over 8% of GDP, compared to 7.2% last year. The largest part of the investments, over 110 billion lei, is supported by European funds, their budget increasing by over 40% compared to 2025, when it stood at 78 billion lei.

For local authorities, the state budget allocates amounts deducted from VAT for a series of essential expenses, the total allocation being 86.4 billion lei, compared to 79 billion lei in 2025. Also on Friday, the plenary session of the Parliament voted, with 314 votes "for", 105 votes "against" and 12 abstentions, the law on the state social insurance budget for 2026, a normative act that provides for total revenues of 159.12 billion lei, of which 158.74 billion lei for the public pension system and 386.5 million lei for the insurance system for work accidents and occupational diseases. The subsidy from the state budget to the state social insurance budget is almost 31.42 billion lei. Total expenditures are estimated at 158.91 billion lei, of which 158.74 billion lei for the public pension system and 165.9 million lei for the insurance system for work accidents and occupational diseases, and the funds intended for the payment of pensions amount to 154.75 billion lei, representing 7.6% of GDP. At the same time, the total revenues of the unemployment insurance budget were estimated at 4.03 billion lei, of which 3.41 billion lei for the unemployment insurance system and 617.1 million lei for the guarantee fund for the payment of salary claims, while total expenditures are foreseen at 3.42 billion lei, of which 3.04 billion lei for the unemployment insurance system and 387.3 million lei for the guarantee fund. Thus, the unemployment insurance system is programmed with a surplus of 374.4 million lei, and the guarantee fund for the payment of salary claims, with a surplus of 229.8 million lei.