The Romanian Government will Increase the Minimum Wage by 9.5% from January

Romania’s coalition government will raise the monthly minimum wage by 9.5% to 4,050 Romanian lei starting in January, according to a statement released by Romanian Prime Minister Marcel Cholaku after meeting with employers and unions. This is equivalent to approximately $884.61.

For information, presidential and parliamentary elections are planned in Romania in November and December. The country’s government has already increased the minimum wage and pension twice, deepening the large budget deficit.

Such decisions further increased inflation in the country and made it the highest rate in Central and Eastern Europe. According to S&P Global’s forecast, the inflation rate in Romania will remain above the target of 1.5%, within 3.5% until 2027.

Along with the 9.5% increase in the minimum wage, the Romanian government plans to introduce tax incentives. The country has not yet published the 2025 government budget.

According to Marcel Çolaku, the government has agreed on a seven-year budget deficit reduction plan with the European Commission. However, the said plan has not yet been published publicly. Fiscal consolidation is crucial for Romania because otherwise, it will not be able to receive recovery and development aid from the European Union, the amount of which will be 74 billion euros by 2027. This assistance is an important contribution to the infrastructural development and economic growth of the country.

The Romanian government has taken responsibility to reduce the budget deficit to the EU target of 3% of GDP by the end of 2024. However, financial analysts predict that the budget deficit, instead of decreasing, will increase to 8% of GDP.