Romania's gross public debt has increased by some RON 5 bln (EUR 1 bln) in August, to RON 550.3 bln (EUR 110 bln) at the end of the month, according to data from the Finance Ministry.

The increase was driven in roughly equal shares by the debt denominated in local currency (RON 251.4 bln at the end of the month) and euros (RON 255.2 bln).

The public debt to GDP ratio has increased from 49.2% at the end of July (revised) to 49.7% at the end of August.

The trajectory projected for the debt-to-GDP ratio largely depends on the fiscal consolidation. The ratio increased from 35.3% in 2019 to 47.3% in 2020.

Moody's projects Romania's debt-to-GDP ratio to continue to rise in 2022 and 2023, peak in 2024 at 56.6% (gross terms) before starting to decline in 2025.

Under a more optimistic scenario (not far from the Government's plans), S&P projects a milder trajectory of the public debt to GDP ratio, seen as remaining below 50% in net terms by the end of the forecast period (48.1% in 2024, after peaking at 48.6% in 2023) and not much above 50% in gross terms (52.4% in 2023 and 51.6% in 2024).

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iulian@romania-insider.com