Twin Deficits And Romania’S Macroeconomic Vulnerability: An Assessment In The Context Of Current Economic Challenges

Twin deficits — the budget deficit and the current account deficit — represent important factors in assessing Romania’s macroeconomic stability, particularly in the volatile context of the global economy. The evolution of these deficits reflects both internal structural imbalances, such as expansionary fiscal policies and import dependence, and external pressures stemming from fluctuations in financial and energy markets. This study analyzes the evolution of the twin deficits based on statistical data provided by European and national institutions for the period 2022–2027, evaluating how these deficits influence economic stability, financing risk, and Romania’s capacity to withstand external shocks. The results highlight the persistence of structural macroeconomic imbalances in the Romanian economy, exacerbated in recent years by expansionary fiscal policies, limited revenue collection capacity, and a high dependence on external financing. Comparative analysis at the European Union level reveals that Romania stands out for having the highest budget and current account deficits, as well as an upward trajectory in public debt. The conclusions emphasize the need for coherent and sustainable economic policies, aimed at fiscal consolidation, structural reforms, and enhancing the economy’s competitiveness over the medium and long term.