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Romania to increase defence spending to 2.5% of GDP

Romanian 2021 defence budget vs 2.5% declaration (Janes)

Following a meeting with Romania's Supreme Council of National Defence, President Klaus Iohannis told a press conference on 1 March that it is necessary to increase the country's defence budget from 2% to 2.5% of GDP in light of Russia's attack on Ukraine.

Florin Cîțu, leader of the National Liberal Party and President of the Romanian Senate, indicated a day later that the increase would take place from 2023. Romania's 2022 budget allocated RON25.9 billion (USD6.14 billion) to defence: a 14% nominal increase on 2021. The official medium-term forecast released with the budget suggested defence would see nominal increases of 8.2–9.3% for the following three years, with defence as a percentage of GDP reaching 2.3% by 2025.

The defence budget would require a 27.4% nominal increase next year to reach 2.5% of GDP. A growth rate of about 5% would be needed to keep it at that level until the end of the 2020s. In real terms, it would mean the budget would increase from USD6.14 billion in 2022 to USD7.6 billion in 2023. An additional USD6 billion would need to be added between 2023 and 2030 to keep it at that GDP level.

Cîțu also suggested a large proportion of the new funds should be used for capital investments, although no precise figure has been released yet. Romania already increased its capital spending by 30% between 2017 and 2022, reaching USD2 billion this year. The forecast released in December 2021 suggested investment would account for 40% of the total defence budget by 2025. That will increase further in light of the new 2.5% goal, and personnel and operational costs are also likely to grow.

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