Government debt, on the increase
Romania's government debt is estimated at almost 200 billion euros.
Ştefan Stoica, 10.06.2025, 14:00
In Romania, public administration debt, or government debt, went this February to a little over 990 billion lei (198 billion euros), from 964 billion lei (about 193 billion euros), in the previous month, according to data made public by the Romanian Finance Ministry. As share of the GDP, government debt increased to 56.3%, from 54.8% in January. In February, medium and long-term debt increased to almost 913 billion lei, from 889 billion lei in January, and short-term debt went up to 78 billion lei, from 75 billion lei in the previous month. The largest part of this debt, over 800 billion lei, was the government bonds. The loans amounted to 161 billion lei.
The debt in the domestic currency amounted to 470 billion lei, that in euros to the equivalent of 413.5 billion lei, and the debt in US dollars to the equivalent of almost 105 billion lei. According to data from the Finance Ministry, in February the debt of the central public administration increased to over 966 billion lei, from 940 billion lei in January, of which most is medium and long-term debt, taken out mainly in lei and euros.
The debt of the local public administration rose slightly to 24.5 billion lei, from 24.4 billion lei in the previous month, mainly medium and long-term. At the same time, in the second month of this year, the internal debt of the public administration amounted to almost 494 billion lei, or 28% of GDP, an overwhelming part of which was represented by the debt of the central administration. The external debt of the public administration accounted for 497 billion lei, or 28% of the GDP, most of which belongs to the central public administration and only a tiny percentage belongs to the local public administration.
In its recent economic report on the EU states, the European Commission mentioned, in the case of Romania, among other things, that the public debt increased to almost 55% in 2024 and estimated that it would reach almost 60% this year. Romania’s budget deficit is the largest in the EU, according to the the European Commission’s report, because Bucharest has not taken any effective recovery measures and has not carried out the fiscal reform that it had assumed and which should have taken effect in April.
According to the Commission, the deterioration of Romania’s financial situation was caused, among other things, by the increase in current expenses, especially wages and pensions. The pro-European parties in the Bucharest Parliament are trying to draw up a joint governing program, focused on budget rebalancing through measures to reduce public spending and on better tax collection. Many analysts fear, however, that the Government will not be able to avoid tax increases, a scenario that business people would not want. (EE)
