Radio România Internațional

Tag: draft budget for 2025

  • February 1, 2025

    February 1, 2025

    2025 BUDGET – The Government has passed Romania’s draft budget for 2025 without modifying any taxes. According to Prime Minister Marcel Ciolacu, the budget focuses on development with 30 billion EUR allotted to investments, an increase of about 6 billion EUR compared to the previous year. At the same time, operating costs will be reduced by 0.5%, and personnel and goods and services costs will be adjusted. The budget was built on economic growth of 2.5%, a budget deficit of 7.04% of GDP, and an average annual inflation rate of 4.4%. Investments and protecting citizens’ purchasing power are the main priorities of the state budget, authorities say. The ministries that will benefit from a budget increase are the ministries of Investment, Transport, Education and the Labor Ministry, while the ministries of Culture, Agriculture, Foreign Affairs, the two chambers of Parliament and the Presidential Administration will see their budgets slashed. The budget and social security bills have been expedited to Parliament for debate and approval.

     

    INVESTIGATION – European Parliament Vice-President Victor Negrescu, has called for the launch of a European action plan to recover the four Romanian artifacts stolen a week ago from an exhibition in the Netherlands, stressing that the robbery must be treated as a crime against the common European heritage. In the Netherlands, the police have revealed the identity and published the photos of two of the three arrested suspects (all Dutch). Law enforcement officers are trying to find out what became of the stolen items: the golden helmet from Coțofenești and the three Dacian bracelets. In the meantime, the exhibits from the collection displayed at the Drents Museum in Assen, except the four artifacts, have arrived in Romania.

     

    TARIFFS – Imports from Canada and Mexico will be taxed 25% starting Saturday upon arrival in the United States, and those from China will be subject to a 10% tariff. President Donald Trump has stressed that these tariffs are instrumental to his economic vision for the United States and that they will help strengthen the economy. News agencies recall that the US, Canada and Mexico have adhered to a free trade agreement, signed by Donald Trump during his first term, but the document is expected to be reviewed in 2026. The White House said it is imposing higher taxes because Beijing produces and distributes fentanyl – a cheap, highly addictive drug, and Mexico and Canada allow the drug to enter the USA. As for Canada, Donald Trump announced that Canadian oil will be taxed 10% starting February 18. Analysts warn that this will trigger an increase in the inflation rate and cascading increase in prices. According to the BBC, 40% of the crude oil in American refineries is imported, and most of it comes from Canada. After president Trump gave assurances that higher customs duties will be introduced for European products in March, French President Emmanuel Macron announced that, on the sidelines of Monday’s informal meeting of European leaders, he would support a decision that encourages European companies to jointly manufacture and purchase weapons.

     

    HOSTAGES – Three more Israeli hostages from Gaza, all men, have been released by Hamas, 16 months after they were kidnapped during the terrorist attack on October 7, 2023. Israel too has freed 182 Palestinian prisoners. This is the fourth prisoner exchange since the ceasefire agreement came into force in Gaza on January 19. At the time, Hamas released 18 hostages. According to the ceasefire agreement, during the first phase, 33 out of the approximately 100 hostages still held in the Palestinian enclave will be released. In the meantime, both parties will need to negotiate the second phase of the ceasefire, which would also involve the withdrawal of Israeli forces from Gaza. Meanwhile, hundreds of Palestinians are expected to cross into Egypt at the Rafah crossing point, which has been recently reopened.

     

    RUGBY – The Romanian national rugby team trounced Germany 48-10 (13-10) on Friday, on the Triumphal Arch stadium in Bucharest in their debut match in this year’s edition of Rugby Europe Championship. In the next round, on February 8, Romania will play Belgium away from home. The top two teams in each group will qualify to the 2027 World Cup to be hosted by Australia. (VP)

  • An outlook on the 2025 budget

    An outlook on the 2025 budget

    In a complicated economic context, where public debt has exceeded 54% of the GDP, and the budget deficit is approaching 9% of GDP, drawing up Romania’s 2025 state budget is no easy task. Especially since two of the main international rating agencies have downgraded the country’s rating from stable to negative. Based on a deficit of no more than 7% of the GDP, the draft budget is expected to be approved by the Government by the end of the week. The bill will then be submitted to Parliament for debate and approval. According to the document, authorities must first cut public spending. Thus, the budget of the Presidential Administration will reportedly be slashed by 10%, that of the Senate by 5%, and that of the Chamber of Deputies by 9%.

     

    The increase in pensions remains under debate, given that the Finance Ministry claims this will not be possible this year. Finance Minister, Tánczos Barna, says the 2025 draft budget, which many regard as moderate, ensures the payment of salaries and pensions and the development of settlements. “The budget stipulates the construction of highways for 20 million Romanians. The budget allots funds for the development of rural infrastructure for all Romanians. We have funds for all Romanians to pay salaries in Education, in the Ministry of the Interior, in all ministries that need to pay salaries, at the level of 2024. We have the proper funds to pay all pensions (…) at the value of November-December 2024, which will remain in place month by month throughout 2025”, the Romanian official pointed out. Minister Barna also mentioned that the budget of the Defense Ministry will be higher compared to 2024 and that the budgets of other ministries, such as the Environment, Health, Education and Transport, will also increase.

     

    To achieve more flexibility, personnel expenses will be reduced in each institution, most of them seeing their budgets slashed by 5%, with the exception of Education, hospitals or Internal Affairs. With respect to loans, Tánczos Barna said the authorities are considering all possibilities in order to cover the budget deficit. “Romania borrowed a lot last year, it will borrow less this year and even less next year. We have a roadmap for reducing loans year by year, over the course of seven years”, Tánczos Barna added. Fortunately, Romania’s downgraded rating did not also change its rating in terms of investor appeal, which would have increased Romania’s borrowing costs. According to experts, skepticism persists, however, among investors and rating agencies, as a result of political instability and delays in implementing structural reforms. (VP)