Romania's financial risks are manageable in the short-to-medium term and the next government will likely pursue gradual fiscal consolidation, but failure to reduce its fiscal and current account deficits would expose the country to external shocks. Romania's Fiscal Council, an independent institution in charge of overseeing the country's fiscal policies, warned on Aug. 20 that it expects Romania's fiscal deficit to surpass 7% of GDP in 2024 and could even exceed 8%, up from 5.7% in 2023. According to the council, this worse-than-expected performance (the Romanian government officially targeted a fiscal deficit of 5% for this year) is the result of higher-than-expected public spending, which was only partially offset by better-than-expected budget revenues....
