Romania's public debt increased by only RON 1 billion (EUR 200 million) in September, to RON 451.1 billion (EUR 92.6 bln), after it soared by nearly RON 27 bln (EUR 5.6 bln) in the first eight months of the year.

The debt to GDP ratio edged up by 0.1pp in September to 42.9%, from 42.8% in August and 35.3% in December 2019.

Romania's public deficit rose 2.5 times year-on-year to RON 67.3 bln (EUR 13.9 bln) or 6.4% of GDP in the first three quarters of this year, which put pressure on the public financing needs.

The full-year public deficit is going to hit 9.1% of GDP, according to the last budget revision published by the Government last week.

The 2.7%-of-GDP deficit in the last quarter of the year will surface in the public debt figures.

Under the Fitch baseline scenario (9.5%-of-GDP public deficit this year), the general government debt to GDP ratio could reach 45.9% of GDP at the end of this year and 50.7% in 2022.

Nevertheless, this will still be below the current BBB median of 52.7% of GDP, and the 2019-22 trajectory is better than the 22pp of GDP increase in public debt during the 2008-11 crisis, according to the rating agency.

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iulian@romania-insider.com