Romania’s Budget Deficit Between Resource and Fiscal Burden

Bogdan-Virgil Condea, Daniela Haranguș and Emima-Florentina Condea
Additional contact information
Bogdan-Virgil Condea: Aurel Vlaicu University of Arad, Arad, Romania
Daniela Haranguș: Aurel Vlaicu University of Arad, Arad, Romania
Emima-Florentina Condea: Aurel Vlaicu University of Arad, Arad, Romania

Journal of Financial Studies, 2025, vol. 10, issue 18, 61-72

Abstract: Given the rise in Romania’s budget deficit beyond the limits set by the Stability and Growth Pact, as well as the current political climate, we aim in this article to analyse the deficit’s evolution in recent years. This analysis is linked to key factors affecting the deficit, such as inflation and interest rates. We chose to correlate the budget deficit with inflation because an increase in inflation leads to a larger deficit by impacting government spending. It is also important to examine the types of expenditures that have driven the deficit up, as a deficit can either serve as an additional economic resource—if used for investments—or become a burden if directed towards political, socialist, or corrupt purposes. Since the deficit is financed through borrowing, rising interest rates negatively impact it by driving up the cost of domestic loans. This study may be valuable for financial analysts in public institutions and potential investors, as the country’s economic situation plays a crucial role in investment decisions.

Keywords: Budget deficit; budget expenditures; financial policies; inflation rate; interest rate. (search for similar items in EconPapers)
JEL-codes: H61 H62 H68 H81 O11 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://revista.isfin.ro/wp-content/uploads/2025/01/3.-Condea-B-et.pdf (application/pdf)
https://revista.isfin.ro/2025/01/09/romanias-budge ... e-and-fiscal-burden/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fst:rfsisf:v:10:y:2025:i:18:p:61-72

DOI: 10.55654/JFS.2025.10.18.03

Access Statistics for this article

Journal of Financial Studies is currently edited by Raluca Ladaru

More articles in Journal of Financial Studies from Institute of Financial Studies Contact information at EDIRC.
Bibliographic data for series maintained by Cosmin Catalin Olteanu ().