Romania’s public debt (chart) edged down by RON2.2bn in June 2024, to RON860.1bn (€172.8bn) at the end of the month according to data published by the finance ministry. The debt-to-GDP ratio fell to 51.4% from 51.5% at the end of May – but it remained above the 50% threshold for the fifth month in a row and further GDP revision will not change this radically. 

Romania’s public debt has increased substantially starting with the Covid-19 crisis in 2020 but the indebtedness ratio remained under the 50% threshold over the four years to 2024 thanks to the robust expansion of the nominal GDP (amid a combination of high inflation and robust economic growth in most of the years). But the slower economic growth this year and lower inflation (GDP deflator) failed to “dilute” the indebtedness ratio that remained above 50% starting with February. 

Although the government was compelled under the Fiscal Responsibility Law to take measures in case the public debt remains above the 50% threshold for six consecutive months (which most likely was the case this year), the executive suspended the provisions of the law under an emergency government decree (OUG 112/2024) passed on September 23 and published on September 25, according to G4Media.

Compared to the end of 2023, Romania’s public debt increased by RON76.6bn.

The debt-to-GDP ratio rose by 2.6 percentage points during the first half of 2024 compared to the end of  2023 amid a 4%-of-GDP public deficit. The deficit will further rise by nearly 3% of GDP in H2, keeping the indebtedness ratio above 50%. 

The government already tapped the international debt market in September with €5bn FX bonds and more issues may follow by the end of the year.

Romania’s public debt under the national methodology, which includes the debt owed by the local Treasuries to central Treasury as well as the government’s commitments reached RON1,011bn at the end of June – or 59% of GDP.