The bet on infrastructure

"It has passed" the budget for 2026. Ambitious, it promises a deficit of only 6.2% and a significant allocation for capital expenditures on critical infrastructure. But will the assumed austerity be the foundation of a solid construction or will it just be a patch applied to a vessel that is taking on water?

For three months, Romania has ventured into uncertainty, unpredictability, and political scandal. Recently adopted, the budget for 2026 aims to be one of "tightening the belt," but with a huge stake on investments. It is practically a turning point in the country's economic growth model, from excessive consumption to sustainable investments. The deficit target of 6.2% of GDP is, in diplomatic terms, an ambition; in economic and fiscal-budgetary terms, it is a brutal necessity. The budget is built on a forecast of economic growth of 1%, a figure that betrays a quasi-stagnation. When the main engine of the economy — household consumption — is suppressed by raising the VAT rate to 21% and by tightening public sector revenues, the state assumes a major risk: that of inducing a technical recession in an attempt to save fiscal appearances. But Romania has held the European record for the VAT "gap" and the current budget relies heavily on the reform of ANAF and on digitization which, although necessary, has not yet delivered the expected results at the cash flow level. Moreover, shocks from the global energy market overlap with rising taxation and create an inflationary "cocktail" that could keep interest rates at prohibitive levels. In an economy where private lending is already anemic, the cost of money will continue to be a brake for small entrepreneurs, leaving the burden of economic growth solely on the shoulders of large state projects.

If there is a ray of hope in this austere landscape, it is the record allocation of over 8% of GDP for investments. It is probably the boldest bet in post-revolution history. Romania is trying to compensate for the decline in domestic demand through massive capital injections into infrastructure, using the last resources from the PNRR and structural funds as an artificial leaven.

If highway construction sites, modernization of electrical networks, and digitization of administration keep pace, there is a chance that Romania will emerge from the crisis with a more resilient economic structure. Then, exceeding the threshold of 60% of GDP for public debt is not just a statistical figure; it is a warning signal regarding our economic sovereignty and in this context, the 2026 budget is a document of "armistice" with external creditors. It is a signal that Bucharest has understood that the party is over.

The political weakness of the governing coalition remains, however, the "Achilles' heel." In a year marked by social and union pressures, the temptation to relax fiscal discipline for the sake of populism will be enormous. Any populist deviation, any concession in the face of the street through the "thawing" of salaries without productive foundation, will nullify the shred of credibility gained by adopting this budget.

After 2026, there will be no more "budgetary vacations," nor excuses, but only deadlines for heavy bills to pay.