Romania’s public debt under ESA methodology (chart) advanced by only RON9bn (€1.8bn) during March, reaching 56.1% of GDP at the end of the month up from revised 55.7% one month earlier and 54.8% at the end of 2024 according to data published by the finance ministry. The end-February indebtedness ratio was revised downward from 56.3% of GDP, in line with the updated four-quarter GDP after the release of the Q1 GDP.

Romania’s public debt rose by €7bn during Q1 2025, mainly due to the FX bonds issued in January and February.

The share of public debt denominated in Romanian leu declined slightly to 46.3% at the end of March from 46.5% at the end of 2024. At the same time, debt denominated in euros increased from 40.5% to 41.1%, while debt in US dollars edged down from 10.2% to 10.1%.

The increase in public debt in Q1 was mainly driven by Romania’s issuance of €4bn in foreign currency bonds in February. An additional €2.75bn was raised in March (partly to refinance maturing debt), bringing the total volume of FX bonds issued in the first quarter of 2025 to €6.75bn. This is more than half of the government’s €13bn external financing target for the year.

In Q2, the government paused further FX bond issuances due to heightened political uncertainty linked to the presidential election campaign. Despite this, retail bond sales continued at a robust pace until June, when retail investors also became more cautious. The Treasury also made private placements.

Romania's public indebtedness increased by 5.9 pp in 2024, amid an 8.65% GDP public deficit (cash terms) and an annual growth of nearly 10% for the nominal GDP (despite sluggish 0.8% real economic growth). This year, the public deficit is expected to narrow, easing the pressure on public indebtedness. However, the lower GDP deflator this year would result in a slower advance of nominal GDP, hence a less visible (positive) impact on the country's indebtedness compared to last year. 

The European Commission, in its Spring Forecast on May 19, projected Romania's public debt at 59.4% of GDP at the end of 2025, to rise to 63.3% one year later. The forecast assumes 1.4% GDP growth and a 0.7 pp decline in the public deficit to 8.6% of GDP (ESA terms) in 2025 from 9.3% in 2024.