Romania’s public debt reached RON 770 billion (EUR 154.8 billion) at the end of November 2023, the Finance Ministry announced. 

The debt to GDP ratio was published at 49.7% under the ESA methodology (based on the latest available four-quarter GDP) but should be adjusted to 48.6% based on projected full-year GDP. At the end of 2022, the ratio was 47.2%.

Furthermore, Romania’s public foreign debt service was nearly EUR 2.5 billion (0.8% of GDP) in December – and although this includes interest as well as possible principal payments, it is likely that overall the public debt (hence public debt-to-GDP ratio) may have slightly dropped at the end of 2023 from our corrected value of 48.6%. 

Romania’s public debt (net public borrowing) increased by RON 104 billion (EUR 21 billion) in January-November last year, or 6.3% of GDP. Net public borrowing was 6.3% of GDP as well in 2022, 6.5% in 2021, and 11.8% in the Covid year 2020. 

Notably, the public debt service in 2023 decreased to 1.9% of GDP from 2.1% in 2022, as the cost of the debt eased. 

Romania began the year 2024 with USD 4 billion FX bonds in January, but even so, the debt-to-GDP ratio based on full-year 2023 GDP most likely remained below 50%.

Romania’s appetite for domestic and foreign borrowing will remain high this year, particularly as the 4.9%-of-GDP public deficit target looks slightly optimistic. Initially, the Treasury estimated a RON 180 billion (EUR 36 billion) gross financing need for this year.

iulian@romania-insider.com

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