Opinion: “Budget 2026 Reflects an Intensifying Fiscal and Economic Crisis”

Semyon ALBU, RTA: One of the main topics of the week in Moldova has been next year’s budget draft, which the government has dubbed the “budget of responsible investments”. Media outlets aligned with the regime rushed to praise the document, highlighting various increases. For example, the minimum wage is set to rise, certain public-sector salaries will go up, and one-time child birth allowances will be provided. But the “highlight of the program” is, of course, the investments. Journalists are relishing quotes from Prime Minister Alexandru Munteanu’s speech, emphasizing that capital expenditures will increase by a whopping 55% – which is being touted as “unprecedented”. The fact that the 2026 budget is projected to have an equally record-breaking deficit – nearly 21 billion lei – is not being emphasized so loudly. However, to preempt criticism and prevent the opposition from exploiting this fact, the authorities have prepared a counter-narrative: supposedly, this is a deliberate and strategic choice aimed at not slowing down “modernization projects”. And, of course, once these projects are implemented, a better life will supposedly follow! Now, let’s smoothly move from the world of PAS’ false fantasies to our harsh reality. Take those very investments the government boasts about. The principle seems to be “if you want to do good for someone, first make things worse”. As experts rightly point out, former Prime Minister Vlad Filat among them, capital investments in last year’s budget were actually significantly reduced. And by 2026, we still won’t reach the 2024 levels, especially after accounting for inflation. Moreover, experience shows that the allocated funds are often underutilized by the end of the year. At the same time, the “unprecedented” amount of capital investments is, for some reason, twice as low as another budget item – debt servicing, which exceeded its planned level by nearly 800 million lei. The main reason for this sharp increase is the “expensive” domestic loans that the government is taking. Why the preference is given to these rather than cheaper foreign borrowings probably needs no further explanation. Incidentally, according to the draft budget, the national debt itself is expected to rise sharply, by almost five percent in a single year. At the same time, almost immediately, the ruling party violates one of its pre-election promises – the indexation of pensions to match inflation. Munteanu explained this by saying that it’s impossible to please everyone and that priorities must be determined, namely: investments, economic growth, and the “future of the younger generation”. In short, dear pensioners, you’ve already done your part in the elections, so the authorities aren’t particularly interested in you anymore. However, this is not the only “affected” category of citizens. For example, education sector trade unions are dissatisfied with the basic salary remaining at 2,500 lei, while inflation is expected to be around 7-9%. The country’s Trade Union Confederation had, in principle, demanded a revision of the draft state budget, arguing that in its current form it “leads to a decline in purchasing power for the majority of public sector workers”. The organization also noted, among other things, that the preparation of the republic’s main financial document was conducted with insufficient transparency and without “social dialogue”. On the other hand, when has PAS ever done otherwise? Overall, there is little to be surprised about. We have long argued that the ruling regime has completely failed in its task of modernizing the national economy, and its ill-considered foreign policy actions have only made the situation worse. It is hardly reasonable to expect any radical changes in this regard from the next term of Sandu/PAS. Their entire economic policy can be summed up by the phrase “foreign assistance will help us”. Yet the government’s incompetence and greed have reached such a level that even Western aid serves merely to “keep things afloat”, with no real discussion of development at all. As a result, experts say that the current model of economic growth has exhausted its potential: remittance flows are declining, real pensions and salaries are barely increasing, and the number of employed people is rapidly falling due to emigration. According to them, there is little reason to expect any significant improvements. Thus, while keeping everyone busy with talks of a bright present and a wonderful future, the authorities are actually focused on finding additional funds, mostly digging into citizens’ pockets. For example, last month the cost of certain government services, such as marriage and divorce registration, rose sharply. More importantly, the program of electricity consumption subsidies, launched this year with EU funds amid the energy crisis, is being discontinued. At the beginning of the year, electricity prices jumped by more than 50%, and according to forecasts, they are unlikely to decrease anytime soon. Especially considering that we have to import up to three-quarters of the required electricity from Romania, often during peak hours at corresponding prices – €140-150 per MWh. And, of course, that’s not €66 from the MGRES… Yet the government believes that people’s incomes have increased over the year, so they should be able to pay without subsidies. A temporary measure, as the prime minister put it. However, the authorities claim that heating subsidies will continue, although their maximum limits have been reduced. Citizens, they say, must understand that by paying these exorbitant gas prices, they are fulfilling an important mission. As Energy Minister Dorin Junghietu noted, the previous tariff of 4 lei was “political”, while 30 lei is, believe it or not, the “price of freedom”. As they say – no further comments. Another unpleasant development: the authorities are preparing to impose taxes on parcels from China, despite a million promises not to do so. Officials have long been itching to snatch a piece of this lucrative pie, but during the pre-election period they didn’t want to incur the electorate’s wrath. Now, however, there are no such restraints, so the machinery of unpopular measures can be cranked up to full speed. In summary, one can say that we are gradually approaching the point of no return, where salvaging the economic situation will be nearly impossible. Even now, our country does not generate enough revenue for self-sufficiency, and the only thing keeping us from catastrophe are loans and international aid. Yet this path still leads nowhere. Meanwhile, the only ones who can rejoice are officials, especially those from the presidency, whose funding has been increased again, banks, whose super-profits no one dares to cut for the good of the country, the military, for whom militarization is now a point of pride, and all those working for or tied to the current ruling regime. As for everyone else, our sincerest condolences, as they say.