Romania’s public debt (chart) measured by EU methodology rose by RON16bn or €3.3bn in July, which is a lot for a slow summer month with no FX bonds, according to data published by the finance ministry.

Under the national definition of public debt—which includes borrowing from the government’s reserve fund held by the Treasury—public debt remained steady at RON1,033bn, or 58.5% of the year’s projected GDP.

However, July proved active for public borrowing. In fact, the (gross) issue of domestic bonds and bills reached RON21bn in July, in line with the average for the previous six months of the year. This was visible in the EU definition of the public debt, even if the executive placed the (net) revenues from the issues in its reserve fund. 

Returning to the EU definition of the public debt, the Treasury added in the ytd period some €18.6bn on the top of the country’s pile of foreign debt, which reached RON876bn or 52.0% of GDP at the end of July. 

The government plans to bring the country’s public debt up to RON923bn by the end of the year. This means adding another €10bn of public debt during August-September. Half of this was raised with three FX bonds adding up to €5bn in September and another Samurai bond (€200mn) in the same month.

Eventually, the annual rise in public debt will reach a new record in 2024 of over €28bn, surpassing the €25.9bn net borrowing in the Covid year 2020.