Romania’s public debt hits 49.7% of GDP at end-November 2023

Romania’s public debt reached RON 770 billion (EUR 154.8 billion) at the end of November 2023, the Finance Ministry announced.

The debt to GDP ratio was published at 49.7% under the ESA methodology (based on the latest available four-quarter GDP) but should be adjusted to 48.6% based on projected full-year GDP. At the end of 2022, the ratio was 47.2%.

Furthermore, Romania’s public foreign debt service was nearly EUR 2.5 billion (0.8% of GDP) in December – and although this includes interest as well as possible principal payments, it is likely that overall the public debt (hence public debt-to-GDP ratio) may have slightly dropped at the end of 2023 from our corrected value of 48.6%.

Romania’s public debt (net public borrowing) increased by RON 104 billion (EUR 21 billion) in January-November last year, or 6.3% of GDP. Net public borrowing was 6.3% of GDP as well in 2022, 6.5% in 2021, and 11.8% in the Covid year 2020.

Notably, the public debt service in 2023 decreased to 1.9% of GDP from 2.1% in 2022, as the cost of the debt eased.

Romania began the year 2024 with USD 4 billion FX bonds in January, but even so, the debt-to-GDP ratio based on full-year 2023 GDP most likely remained below 50%.

Romania’s appetite for domestic and foreign borrowing will remain high this year, particularly as the 4.9%-of-GDP public deficit target looks slightly optimistic. Initially, the Treasury estimated a RON 180 billion (EUR 36 billion) gross financing need for this year.

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