Romania's public debt hits 52.6% of GDP after latest FX bond in May

Romania's public debt reached RON 862.3 billion (EUR 173.3 bln) at the end of May, RON 9.5 bln (EUR 1.9 bln) more compared to a month earlier after the government raised EUR 3.24 bln with the third series of Eurobonds this year.

The debt-to-GDP ratio reached 52.6% at the end of May, from 52.1% at the end of April and 48.8% at the end of 2023.

The sovereign indebtedness ratio remained above 50% for the fourth consecutive month.

Romania will tap the market with FX bonds twice by the end of the year, namely at the end of August (or the beginning of September) and in November, announced the minister of finance, Marcel Bolos, in August.

The budget deficit topped 4% of GDP in January-July (no official data was announced), up from 3.6% in January-June, he said.

The new deficit target (likely to be set at 6.9% of GDP from 5% of GDP initially) leads to higher gross financing requirements, seen by minister Bolos RON 35 bln (EUR 7 bln) or 2% of GDP above the target initially planned. Part of it would be completed through the two FX bonds planned by the end of the year.

"We have a RON 181 bln gross financing requirement for this year, out of which we have already achieved RON 158 bln so far. As the budget deficit increases, it is natural to update the gross financing requirement. If we use the European Commission's estimate [6.9% of GDP], we have to lift the gross financing target to RON 215 bln in the first stage," said the minister.

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