Romania’s public debt increased by RON 14.5 billion (EUR 2.9 billion) in April to RON 1.013 billion (EUR 203.5 billion) at the end of the month, amid the EUR 2.75 billion FX bonds issued by the Treasury at the end of March but registered on April 2.
In the first four months of the year, Romania’s public debt already increased by RON 49.2 billion (EUR 9.9 billion) and the debt-to-GDP ratio advanced by 1.9 percentage points to 56.6% at the end of April. The figure will be revised slightly downward after Q2 GDP is released.
In absolute terms, Romania’s public debt increased by EUR 9.9 billion in the first four months of the year, after the record EUR 36.1 billion advance in 2024.
The record rise in the country’s public debt last year, measuring 10.2% of GDP, was aimed at financing the equally high deficit (8.65% of GDP in cash terms). In 2025, the deficit is expected to subside, but will remain significant as well, around 8% of GDP, keeping high the public financing needs.
The RON 56 billion public deficit in January-April was incompletely covered by the RON 49.2 billion rise in public debt, which keeps the pressure on public borrowing. In July, after the political turmoil diminished and the government’s fiscal consolidation plan eased investors’ concerns, the Treasury came up with a third FX bonds issue.
Out of the total public debt at the end of April, RON 506.7 billion (28.4% of GDP) is internal, and RON 504.5 billion (28.2% of GDP) is external.
By currency, the public debt denominated in local currency decreased to 46.5% at the end of April, after it exceeded 48% in 2023-2024 (48.5% at the end of 2024). The debt denominated in euros accounted for 43.9% at the end of April, up from 41% at the end of 2024 after the two FX bond issues in January and April.
The fiscal consolidation is expected to ease the pressure on public borrowing and indebtedness, but the debt-to-GDP ratio is still expected to exceed 60% in the near future.
Prime minister Ilie Bolojan recently stated that the government is targeting a 2025 deficit of “around 8% of GDP” in cash terms. Under the revised Excessive Deficit Procedure (EDP) consolidation trajectory sketched by the European Commission, Romania should return to a deficit of 6.4% of GDP in 2026 – which is seen as feasible by independent analysts.
Despite this adjustment, independent analysts expect Romania’s indebtedness to exceed the 60% threshold soon – UniCredit bank, for instance, forecasts a steep rise in public debt, reaching 62.1% of GDP by the end of 2025 – up from 54.8% in 2024 – and increasing further to 66.2% in 2026. Moody’s expects a slightly lower public debt level of 62.6% of GDP by the end of 2026.
iulian@romania-insider.com
(Photo source: Inquam Photos/Octav Ganea)
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