Romania’s public indebtedness steady after sharp rise in 2020

Romania’s public debt reached RON 654.5 bln (EUR 133 bln) at the end of November 2022, RON 77 bln (EUR 15.7 bln up YTD) more than at the end of last year. The debt-to-GDP ratio, however, edged down to 48.3% one month before the end of 2022, up from 48.4% at the end of 2021.

Romania’s public indebtedness remained steady at around 48%-49% of the GDP after it rose significantly in 2020 as the Government needed resources to extend economic subsidies and social support during the Covid-19 crisis.

The high inflation partly helped the state to dilute its debt at the expense of the debtholders (including pension funds and banks), seeing their portfolios shrinking.

In October, Romania’s public debt rose by only RON 4 bln – compared to an average of RON 7.7 bln in the first ten months of the year.

No significant rise in the public debt is expected for December – while the figures will spike possibly above 50% at the end of January – after the Treasury tapped the foreign markets twice in a month. But the frontload borrowing means the ratio would further ease through the year as the Government borrows less.

(Photo source: Ungureanu Vadim/Dreamstime.com)