Romania’s public debt increased by RON 174.4 billion, or 18.1% y/y, to RON 1.138 billion (EUR 223.3 billion, 59.6% of GDP) at the end of December 2025, according to data published by the Finance Ministry.

Although remaining under the 60% threshold, the debt-to-GDP ratio marked a significant 4.8 percentage points 9pp) advance – not as steep as the 5.9pp advance marked in 2024 but still a big concern for the country’s indebtedness profile. The slightly milder deterioration marked in 2025 was due to a narrower budget deficit (7.65% of GDP compared to 8.65% in 2024), visible in the comparatively smaller advance of the public debt: EUR 34.2 billion in 2025 compared to EUR 36.1 billion in 2024. The leap marked by Romania’s public debt remains massive in absolute terms, however. 

The deterioration of the debt-to-GDP ratio, although steep, was somehow sweetened during 2024 and 2025 by the nominal GDP expansion (+8.5% y/y in 2025 after +9.7% y/y in 2024). This dilution effect, already weaker in 2025, is likely to further dissipate in 2026 unless the oil price shock has a significant permanent component that generates a significant inflationary shock.

The fiscal consolidation this year, when the cash budget deficit should drop under 6.5% of GDP, and later in 2027, should generate a smaller nominal advance of the country’s public debt and an even smaller deterioration of the indebtedness ratio.

In its latest review of Romania’s sovereign rating, international agency Moody’s assuming the deficit declines to 6.3% of GDP this year and 5.7% of GDPin 2027 (under ESA terms), estimated Romania’s government debt will increase to only 62.9% of GDP by that time, up from 60.5% estimated at that time for the end of 2025 (actual smaller indebtedness at the end of 2025 should bring down the end-2027 projection lower). Debt is expected to continue rising gradually before stabilising at around 65% of GDP toward the end of the decade, the rating agency says, describing rather the optimal consolidation trajectory that the country should follow.

In 2025, the maturity profile of Romania’s public debt has improved slightly, with the share of the short-term debt decreasing to 6.9% of total at the end of December, from 8.3% one year earlier. 

By the nature of the instrument, the share held by loans (versus bonds and bills) increased to 18.0% of total, from 16.4% at the end of 2024, as the Treasury relied to a larger extent on private placements intermediated by major US banks. This generated a slight increase in the share of foreign-denominated public debt, to 52.8% of the total at the end of 2025 from 51.5% at the end of 2024 (the advancement of foreign debt’s share was magnified by the local currency’s depreciation, which made the foreign-denominated debt larger when expressed in local currency).

A small part of the increase in the public debt expressed in local currency (+18.1% y/y) in 2025 was caused by the local currency’s nominal depreciation (2.5% y/y measured at the end of December 2025) that magnified the size of the foreign denominated debt, just over half of the total public debt that increased by 21.4% y/y to RON 595.9 billion at the end of December although when expressed in euros it advanced to EUR 115.9 billion, by only 18.4% y/y. At the same time, the public debt denominated in local currency increased by 15.1% y/y to RON 517.3 billion at the end of 2025.

iulian@romania-insider.com

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