Romanias public debt increased by 18.5% y/y to RON 237.8bn (EUR 53.3bn) at the end of May, while the debt to GDP ratio advanced by 4.5pps to 39.1% over the same period, the countrys finance ministry said in a statement. Of the total public debt, 51.9% is denominated in foreign currency and the remaining 48.1% in local currency. Forex-denominated debt increased rather moderately, by 5.3% y/y at the end of May, while borrowing in local currency surged 23.7% y/y. Under a broader perspective, Romanias public debt has roughly doubled over the past four years, rising from EUR 25bn (19.1% of the years GDP) at the end of May 2008 to EUR 53.3bn (39.5% of the years projected GDP). The rise was, however, steeper in the first years of crisis, while recent fiscal consolidation has eased the pressure on public indebtedness. The ministry reports the data under the national methodology and the debt includes temporary borrowing from the states own sources. Under the ESA methodology that includes only borrowing from third-party lenders, the public debt was only RON 212.1bn (EUR 47.5bn), or 34.9% of GDP, at the end of May. Out of this, the external debt was equal to 17.2% of GDP and the domestic debt to 17.7% of GDP. The debt to GDP ratio increased under the ESA methodology even steeper than under the national calculations, surging from 13.4% of GDP at the end of 2008 to 33.3% at the end of 2011 and 34.9% at the end of May. The external debt doubled from 8% of GDP at the end of 2008, while the domestic debt more than tripled from 5.4% at the end of 2008. The strong domestic borrowing was, however, facilitated by foreign-owned banks shifting their resources from lending to private sector to lending to the state. Eventually, total external borrowing [including this indirect external borrowing through foreign owned banks] is higher than the official 17.2% of GDP.
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