Moldova is facing a budget deficit equivalent to 6% of GDP, much of which is being financed through short-term borrowing, Minister of Economic Development and Digitalisation Claudiu Năsui has warned, according to Bani.md. He added that the government must urgently cut spending, even if such a decision causes public discontent and carries a high political cost.
“We have a 6% deficit. It is absolutely enormous, colossal. Most of it is financed in the short term. I don’t think we fully understand what that means. We have to reduce the deficit,” Năsui said during a programme on Moldova 1.
The minister explained that the deficit represents the difference between government spending and revenue collected, with the shortfall covered by loans that will ultimately have to be repaid using taxpayers’ money.
“Revenue comes from taxes, from your money. But where does the difference come from? In fact, it also comes from our money, but from the future. It comes from debt. The state says: ‘I don’t have the money, so I’ll borrow it and pay you back later.’ But where will the state get that money later? From you again,” Claudiu Năsui explained.
According to the Minister of Economic Development and Digitalisation, there are two main ways to reduce the deficit: increasing taxes or cutting public spending. Năsui rejects the first option, arguing that additional tax pressure would hurt businesses, discourage formal employment and encourage the informal economy.
“Either you raise taxes, putting more pressure on entrepreneurs, further discouraging declared employment and entrepreneurship, and encouraging the informal sector. Between these two options, my choice is clear,” the minister stressed.
However, Năsui acknowledged that cutting government spending is much more difficult politically, as every group receiving public funding will seek to defend its allocations.
“It is much harder politically to cut spending. Someone who receives that money will shout and ask: ‘Why are you cutting my funding? I deserve it. I need it.’ But the fundamental problem in economics is that needs are infinite, while resources are finite,” he explained.
The minister insisted that the authorities should not shift the burden of budget adjustments onto taxpayers, but should begin by reducing government expenditure, according to the cited source.
“If we want to do what is best for this country, we have to cut spending. We must reduce government expenditure, even if it is politically very difficult. Raising taxes is politically much easier because you take money from citizens. But that should not happen,” Năsui concluded.
The minister’s remarks come as the government led by Vasile Tofan has set a target of reducing the budget deficit from approximately 6% of GDP in 2026 to below 5% in 2027.