Romania Surpasses Historic Public Debt Milestone Amid Escalating Fiscal Pressures

Romania has crossed a significant financial threshold, with public debt now exceeding EUR 200 billion, and fiscal sustainability has become an urgent national concern. The rapid growth in debt, driven by budget deficits, increased borrowing, and ambitious financing needs, poses critical challenges for the country’s economic future and government stability.

Romania recently crossed a historic threshold as its public debt exceeded EUR 200 billion for the first time, reaching 1,013.16 billion RON in April 2025. This surge positions public debt at 56.6% of the country’s GDP, up from 55.8% in March and significantly above the 35% ratio recorded at the end of 2019. Estimates for the end of the year suggest that debt may approach 1,100 billion RON, equivalent to 58.1% of the country’s GDP.

The key driver behind this escalating debt is the government’s substantial budget deficit. For 2025, the deficit was set at 7% of GDP by the national budget law, translating to around 135 billion RON. At the end of the previous year, public debt stood at 964.4 billion lei, or 54.8% of GDP, making this recent jump particularly significant.

The increase in debt was influenced by borrowing from both domestic and foreign markets. In late March, the government raised 2.75 billion euros through external bond markets, with the transaction officially recorded in early April. This contributed to the debt surpassing the 1,000 billion lei mark.

For 2025, the gross financing need at the government level is forecast to be approximately 232 billion lei, excluding cash management instruments. The Finance Ministry plans to cover about 45% of the budget deficit from domestic sources and 55% from foreign sources. In comparison, the government borrowed 252 billion lei in 2024, resorting to multiple increases in the borrowing program throughout the year due to higher-than-expected deficits.

As Romania’s public debt continues to rise, concerns mount regarding the nation’s fiscal sustainability and economic resilience. The growing debt ratio signals challenges ahead for fiscal management and the country’s ability to balance budgetary pressures with the need for economic stability.