Romania’s public debt increased by RON 30.3 billion (EUR 6 billion) in July after the new government of prime minister Ilie Bolojan returned to the international market following a period of absence due to the political turmoil caused by the presidential elections and the formation of a new ruling majority.
Romania’s public debt hit RON 1.07 trillion (EUR 210.8 billion) at the end of the month, RON 106 billion (EUR 20.9 billion) more compared to the end of 2024. Part of the year-to-date advance, namely EUR 3.9 billion, was caused by the local currency’s weakening in May.
The Finance Ministry estimates the country’s public debt to GDP ratio reached 58.9% at the end of July based on the latest available GDP data, but the ratio will be revised downwards slightly after Q3 GDP is estimated.
The ratio increased significantly from 57.3% at the end of June and 54.8% at the end of 2024. It is likely to reach 59.1% at the end of 2025 and exceed the 60% threshold during 2026, according to the European Commission’s Autumn Forecast.
The Ministry of Finance borrowed USD 3.75 billion in two separate issues with maturities of five and ten years in July, and a further EUR 1.5 billion by reopening a euro-denominated bond maturing in 2039. Prior to the July issues, Romania sold FX bonds in February (the equivalent of EUR 4 billion) and March (EUR 2.75 billion).
Separately, the country has arranged private placements on the international markets, estimated by Ziarul Financiar at EUR 3.2 billion – out of which EUR 1 billion in July, for a period of three years with a coupon of EURIBOR plus 2 percentage points. In October, the state took another EUR 275 million and USD 125 million with the help of Deutsche Bank and Goldman Sachs.
Following the massive foreign borrowing despite the complicated political context, the structure of Romania’s public debt has shifted towards more foreign currency during 2025: the stock of public debt denominated in euros, US dollars, or other currencies (yen) rose to 54.2% at the end of July, 2.8 percentage points up compared to the end of 2024. Accordingly, the public debt denominated in local currency decreased to 45.8%, from 48.5% at the end of 2024 and 48.2% at the end of 2023.
iulian@romania-insider.com
(Photo source: Romolo Tavani/Dreamstime.com)
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