Nicusor Dan warns that Romania must meet its deficit-reduction targets to avoid a downgrade in its credit rating

President Nicusor Dan said Tuesday at Cotroceni Palace that Romania’s financial situation must be viewed calmly, but that the targets assumed for reducing the budget deficit must be respected without fail. He warned that any deviation would affect the country’s credibility with financial markets and rating agencies.

According to the president, the 2026 budget provides for revenues of 730 billion lei and expenditures of 860 billion lei, generating a deficit of approximately 150 billion lei. Of this amount, 60 billion lei represents interest on debt accumulated previously.

Nicusor Dan explained that Romania is on the borderline between investment recommendation and non-recommendation. A possible rating downgrade could lead to the withdrawal of some investment and pension funds, while the state would have to borrow at higher costs. In a severe scenario, Romania could end up seeking support from the IMF, with drastic adjustment conditions.

The president stressed that reducing the deficit would be difficult without measures affecting spending on salaries and pensions. Higher borrowing costs would affect the population and companies, potentially leading to bankruptcies and unemployment. Recovering after losing the markets’ confidence can take six to seven years, he added.