Romania’s public debt reached RON 526.6 bln (EUR 107.5 billion) at the end of April, the equivalent of 49.9% of the GDP estimated for 2021.

The Government placed Eurobonds in the amount of EUR 3.5 billion on April 7, in its first issue on international markets this year. As a result, the debt leapt up by RON 20 bln (EUR 4 bln) and the debt-to-GDP ratio edged by 1.9pp in the month alone.

Compared to the end of 2020, Romania’s debt advanced by RON 27.5 bln (EUR 5.5 bln) and the debt-to-GDP ratio by 2.6pp.

Over the previous year, the public indebtedness measured RON 125.6 bln (over EUR 25 bln), and the debt-to-GDP ratio has deteriorated significantly by 12pp to 47.3% at the end of the year.

Speaking about the public borrowing - accused by the Social Democrat opposition as further increasing the burden placed on the coming generations - prime minister Florin Citu stated that “the debts are only for profitable investments.”

Romania’s external debt will increase by another EUR 16 bln only due to the Resilience Plan in the coming years until 2026.

Separately, fiscal consolidation is supposed to ease the pressure placed on public debt by the fiscal deficit. The public budget gap is supposed to drop under 3% of BGP by 2024, but this year it is still planned to over 7% of GDP - possibly revised downwards amid stringer than anticipated GDP growth in the year.

iulian@romania-insider.com

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