Romania’s public indebtedness eases to 35% of GDP in September

Romania’s public debt at the end of September 2018 hit RON 313.4 billion (EUR 67.4 billion), or 35% of the GDP estimated by the Government for whole year. The public debt increased by 5.2% compared to the end of September 2017. In absolute terms, the increase was RON 18 billion, or EUR 3.87 billion accounting for some 1.9% of the year’s GDP. However, the debt-to GDP ratio decreased to 35% at the end of September 2018 from 35.6% one year earlier. The public indebtedness is within the 40% of GDP limit estimated by the central bank as the critical threshold and well below the 60% of GDP threshold set under the Maastricht criteria. The risks related to the external indebtedness are generated by the refinancing costs in the case of external shocks. Nonetheless, the indebtedness ratio is expected to rise significantly, albeit probably not exceeding the 40% threshold, in case of significant fiscal slippage and economic slowdown (a scenario that would push up the public financing cost as well). Romania’s short-term external debt rises above EUR 30 bln editor@romania-insider.com (photo source: Pixabay.com)