Romania’s public debt, as measured by the EU methodology, rose by RON 16 billion or EUR 3.3 billion in July, which is a lot for a slow summer month with no FX bonds, according to data published by the Finance Ministry.

Under the national definition of public debt, which includes borrowing from the government’s reserve fund held by the Treasury, public debt remained steady at RON 1,033 billion, or 58.5% of the year’s projected GDP.

However, July proved active for public borrowing. In fact, the (gross) issue of domestic bonds and bills reached RON 21 billion in July, which is in line with the average for the previous six months of the year. This was visible in the EU definition of the public debt, even if the executive placed the (net) revenues from the issues in its reserve fund. 

Returning to the EU definition of public debt, the Treasury added in the YTD period some EUR 18.6 billion on top of the country’s pile of foreign debt, which reached RON 876 billion (EUR 176.1 billion) or 52.0% of GDP at the end of July. 

The government plans to bring the country’s public debt up to RON 923 billion (EUR 186 billion) by the end of the year. This means adding another EUR 10 billion of public debt during August-September. Half of this was raised with three FX bonds summing up to EUR 5 billion in September and another Samurai bond (EUR 200 million) in the same month. 

Eventually, the annual rise in public debt will reach a new record in 2024 (over EUR 28 billion), surpassing the EUR 25.9 billion net borrowing in the COVID year 2020.

iulian@romania-insider.com

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