Romania's public debt-to-GDP ratio up 3.9pp ytd to 52.7% at end-Aug

Romania's public debt rose by over RON 10 bln (EUR 2 bln) in August to reach RON 887 bln (EUR 178.2 bln) at the end of the month. The debt-to-GDP ratio calculated under ESA methodology, namely based on the latest available 12-month GDP, reached 52.7%, up from 50.0% one month earlier and 48.8% at the end of 2023.

Lower inflation and economic growth, besides the wider budget deficit this year, resulted in a faster advance of the country's indebtedness. Thus, the debt-to-GDP ratio rose by 3.9 percentage points (pp) in the first eight months of the year, after only 1.3pp in the whole of 2023.

Romania's government, under the medium-term fiscal consolidation plan, envisages the debt-to-GDP ratio to exceed 60% and not decrease below this benchmark before 2031 – when the budget deficit would be brought down to 2.5% of GDP from a 7.9%-of-GDP gap this year.

In absolute terms, the public debt increased by EUR 20.8 bln in January-August this year – less, but not far from the EUR 23.7 bln advance in 2023.

Of the RON 103 bln ytd rise in the public debt, nearly RON 50 bln was on the side of the domestic currency-denominated debt (48% of total public debt at the end of August), while the stock of public debt denominated in euros 42.5% of total) advanced by nearly RON 40 bln and the USD-denominated debt (9.3%) rose by RON 15 bln.

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