Romania's public debt increased by RON 26.5 billion (EUR 5.2 billion) in the first two months of 2025, reaching RON 990 billion (EUR 199.1 billion) at the end of February, according to data published by the Finance Ministry. 

The debt-to-GDP ratio increased to 56.3% at the end of February, 1.5 percentage points up from 54.8% at the end of 2024.

Out of the total debt, RON 493.8 billion (28.1% of GDP) was domestic public debt, and RON 497.0 billion (28.2% of GDP) was external public debt at the end of February. In the first two months of the year, the domestic public indebtedness increased by 0.5 percentage points (pp) and the external public debt by 1.0 pp. 

Romania's public indebtedness increased by 5.9 pp in 2024 amid an 8.65% GDP public deficit (cash terms) and an annual growth of nearly 10% for the nominal GDP (despite sluggish 0.8% real economic growth). 

This year, the public deficit is expected to narrow, easing the pressure on public indebtedness. However, the lower GDP deflator this year would result in a slower advance of nominal GDP, hence a less visible (positive) impact on the country's indebtedness compared to last year. 

The European Commission, under its Spring Forecast on May 19, projected Romania's public debt at 59.4% of GDP at the end of 2025 to rise to 63.3% one year later. The forecast assumes 1.4% GDP growth and a 0.7 pp decline in the public deficit to 8.6% of GDP (ESA terms) in 2025 from 9.3% in 2024.

The share of local currency-denominated public debt in total public debt decreased to 45.5% at the end of February from 46.5% at the end of 2024. The share of public debt denominated in euros increased from 40.5% to 41.2%, and the share of public debt denominated in euros from 10.2% to 10.6%.

The rise of Romania's public debt in the first two months of 2025 was particularly due to the EUR 4 billion FX bonds issued in February.

Further advance in public indebtedness is expected in March, when EUR 2.75 billion of FX bonds were issued – bringing the total volume of FX bonds issued year to date to EUR 6.75 billion, out of a EUR 13 billion target for the entire year. In April-May, Romania put on hold FX bond issues amid increased political turmoil. 

However, the issue of bonds to households continued at a fast pace until May – when even the local individual investors turned cautious amid the presidential elections. 

Overall, Romania sold to households a volume of bonds worth over RON 21 billion (over EUR 4 billion) in the first four months of the year. By comparison, RON 25 billion in bills and bonds have been issued on the interbank market in the same four-month period.

iulian@romania-insider.com

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