Romania’s foreign debt up 15% y/y at end-Sept, yet indebtedness eases

The external debt of Romania increased by 15% y/y to EUR 161.3 billion at the end of September 2023, according to data published by the National Bank (BNR).

The debt-to-GDP ratio, however, decreased to 52.8% from 53.7% in September 2022 and 58.0% in September 2021.

The decrease in the country’s indebtedness metric, despite the notable advance in the nominal external debt, was possible thanks to the leap marked by the nominal GDP (+17.3% y/y for the 12-month GDP as of June 2023, latest data available).

Out of the total external debt, the government’s debt was EUR 73.3 billion at the end of September 2023, 32% up y/y.

The government’s external debt thus surged by nearly EUR 18 billion in just one year. As a ratio to GDP, the public debt rose to 24% as of September 2023, up from 21.3% one year earlier.

All the other non-government entities thus reduced their external debt when expressed as a ratio to GDP, from 31.9% to 28.8%. This was possible mainly because the FDI companies reduced borrowing from parent groups after the COVID-19 crisis, and the cash constraints dissipated.

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