The World Bank’s (WB) Board of Executive Directors approved on Monday, March 31, a Development Policy Loan (DPL) worth USD 650 million, designed to support the Romanian government’s efforts to strengthen fiscal sustainability, boost the development of the private sector, and foster job creation, according to a release of the international financial institution.
According to the WB, the loan, equivalent to EUR 544 million, will create new opportunities for citizens and companies, from more accessible finance for small businesses to cleaner, more competitive industries and energy efficiency.
The institution mentioned that this funding comes at a critical moment for Romania’s economy.
“In 2024, fiscal and current account deficits as a share of GDP were the widest in the EU. The government has responded with a robust reform program to put its public finances on a sustainable footing while laying the groundwork for stronger, more inclusive growth through a sound fiscal consolidation program. This loan will support the continued implementation of the government’s reform agenda,” according to the WB release.
The loan is organised around two pillars. The first focuses on restoring fiscal sustainability by addressing structural weaknesses in tax policy and public spending, with measures projected to support fiscal consolidation toward a deficit target of 3% of GDP by the end of 2030.
The second pillar focuses on boosting economic growth in the private sector and promoting job creation by easing key constraints to investment and competitiveness, including access to finance, innovation and digitalisation, and reliable and affordable energy.
“Romania has taken bold and necessary steps to get its public finances on track and is seeing results as deficits narrow and financing costs come down. We expect these ambitious reforms to restore fiscal health, catalyse private investment, and create jobs. This financing reflects our confidence in Romania’s steadfast efforts and our long-standing partnership with the government,” Yasser El-Gammal, World Bank Country Manager for Romania and Hungary, said, as quoted in the release.
iulian@romania-insider.com
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