Romania’s public debt reaches 42.5% of GDP at end-2013

By bne IntelliNews April 22, 2014

Romania’s general government debt increased by 10.8% y/y to RON 267bn [EUR 59.5bn] at the end of 2013, the finance ministry announced under the local methodology calculations. The debt-to-GDP ratio inched up by 1.5pps to 42.5%.

At the end of 2008, before the recession period, the ratio stood at 21.3%.

Under the ESA methodology, which does not include the borrowing from own reserve funds, the country’s public debt was only RON 241.4bn [EUR 53.8bn], up 8.4% y/y. The debt-to-GDP ratio thus edged up by only 0.4pps to 38.4% at the end of the year - however, a considerable 25pps up against the 13.4%/GDP level at the end of 2008.

Sticking with the EU methodology, the government’s domestic public debt-to-GDP ratio increased more than three times from 5.4% at the end of 2008 to 17.5% at the end of 2013. The external public debt to GDP ratio increased only 2.5 times from 8.0% at the end of 2008 to 20.9% five years later. The absolute rise of the domestic and external debt ratios was however pretty similar – around 12pps.

The structure of the country’s public debt changed significantly since the end of 2008 – in the sense of larger shares of Eurobonds and local currency bonds at the expense of fewer shorter-term bills. Thus, the share of Eurobonds in total public debt [under the national methodology] increased from 8.5% at the end of 2008 to 18.2% at the end of 2013. The share of local currency bonds increased over the five-year period even more robustly from 9.4% to 38.9%. The share of T-bills decreased from 8% to 4.1%. The borrowing from the own state reserve funds shrank from 39.4% to 7.6%.

Romania’s public debt service is expected to decrease to EUR 12.8bn in 2014 from EUR 14.9bn this year, according to data available at the end of 2013, the finance ministry reported. The forecast [available in the table below] includes, however, the short-term debt that is rolled over and will eventually generate higher payments in 2014 – compared to the estimates as of end-2013 that does not include repeated re-financing.

The external debt service – where the misleading effect mentioned above is not relevant, shows that the debt burden increases to nearly EUR 5bn in 2015.

  2013 2014 2015 2016 2017 2018
Public debt service [RON mn] 65,823.3 57,050.3 44,590.5 42,063.1 26,589.0 26,755.3
principal 55,581.8 46,098.6 35,833.7 34,842.6 21,032.1 22,171.2
interest, fees 10,241.6 10,951.6 8,756.8 7,220.5 5,556.9 4,584.0
Domestic debt service 53,990.4 43,882.9 22,763.2 27,484.0 14,077.7 7,383.7
principal 47,622.7 37,697.5 18,695.3 24,425.2 12,205.6 6,253.1
interest, fees 6,367.7 6,185.4 4,067.9 3,058.8 1,872.1 1,130.6
External debt service 11,832.9 13,167.4 21,827.3 14,579.2 12,511.3 19,371.6
principal 7,959.1 8,401.2 17,138.4 10,417.4 8,826.5 15,918.2
interest, fees 3,873.9 4,766.2 4,688.9 4,161.7 3,684.8 3,453.4
             
RON to EUR 4.42 4.45 4.4 4.4 4.37 4.37
Public debt service [EUR mn] 14,892.1 12,820.3 10,134.2 9,559.8 6,084.4 6,122.5
principal 12,575.1 10,359.2 8,144.0 7,918.8 4,812.8 5,073.5
interest, fees 2,317.1 2,461.0 1,990.2 1,641.0 1,271.6 1,049.0
Domestic debt service 12,215.0 9,861.3 5,173.5 6,246.4 3,221.4 1,689.6
principal 10,774.4 8,471.3 4,248.9 5,551.2 2,793.0 1,430.9
interest, fees 1,440.7 1,390.0 924.5 695.2 428.4 258.7
External debt service 2,677.1 2,959.0 4,960.8 3,313.5 2,863.0 4,432.9
principal 1,800.7 1,887.9 3,895.1 2,367.6 2,019.8 3,642.6
interest, fees 876.4 1,071.1 1,065.7 945.8 843.2 790.3
Source: FinMin            

Related Articles

IIB agrees pilot financing deal for Russian-Romanian trade

The International Investment Bank (IIB) is expanding its trade financing operations with a €2.25mn one-year pilot loan to Russia's B&N Bank, the Moscow-based lender said in a statement on ... more

Romania to hold referendum on anti-corruption fight

The Romanian parliament endorsed President Klaus Iohannis' plan to hold a referendum on the continuation of the anti-corruption fight on February 13.  Iohannis said in January he will ... more

Romanian government envisages €10bn sovereign wealth fund

Romania’s government discussed plans for the proposed Sovereign Fund for Development and Investment (FSDI) on February 9, the government ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss