Romania’s public debt rises by another EUR 1 bln in January

Romania’s Government debt increased by over RON 5 billion (EUR 1 bln) in January, to RON 503.6 bln (EUR 103.4 bln) at the end of the month. The debt to GDP ratio edged up by another 0.5pp to 47.8% at the end of January, as reported by the Finance Ministry based on ESA methodology, namely for the 4-quarter rolling GDP, according to Romania-Insider.com.

The debt, in absolute terms and as a ratio to GDP, increased in January at half the average pace in 2020 – when the debt to GDP soared by 12pp to 47.3% as the Government added nearly RON 125 bln (EUR 25.6 bln) on the top of the public debt.

Under the fiscal-budgetary responsibility law (69/2010), the Government should take steps to reverse the fiscal slippage once the debt to GDP ratio exceeds 50%.

Separately, the rating agencies will monitor the Government’s policies more closely once the indebtedness crosses this benchmark. On the other hand, the Government needs to finance the budget deficit that is unlikely to decrease below 7% of GDP in 2021.

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