Romania's public debt up 1.2pp m/m to 57.8% of GDP at end-May

Romania's public debt surged by RON 21.5 billion in May alone and by RON 70.7 billion year to date, reaching RON 1.035 billion (EUR 204.1 billion) or 57.8% of GDP at the end of May, according to data published by the Finance Ministry.

Romania's public debt rose by RON 70.8 billion (EUR 14 billion) in January-May, after the record EUR 36 billion surge in 2024. Part of the rise was caused by the local currency's depreciation, which caused a EUR 3.7 billion increase alone.

The debt-to-GDP ratio rose by 1.2 percentage points (pp) since the end of April, a rather impressive leap in the absence of FX bond issuances during the presidential elections' turmoil.

The debt-to-GDP ratio would dilute to 56.8% based on the updated four-quarter GDP, including Q2, but the heavy borrowing in May remains significant in absolute terms.

The public debt data, published with a delay by the government (end-June debt may be released soon), shows massive local currency net borrowing during the month of May: RON 15.7 billion (over EUR 3 billion) compared to RON 3.4 billion net local currency borrowing in January-April.

With no FX bonds issued, the public debt denominated in euros increased by only RON 3.8 billion in May – an advance caused solely by the local currency's depreciation versus the euro and not by new debt. In fact, the public debt denominated in euros decreased by EUR 858 million during May to EUR 88.5 billion at the end of the month, after the EUR 9.8 billion surge in the first four months of the year.

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