Romania's economy, seen through money: who has a surplus, who lives on debt and why this matters

At first glance, national financial accounts they seem like a technical document, intended for economists. In reality, they tell a much simpler and more important story: who saves in Romania, who borrows, who finances whom – and how healthy the economy is as a whole.

The annual report on the Balance of Payments and International Investment Position published on Friday by the National Bank is, in essence, an x-ray of money flows in the economy: between companies, banks, the state, the population and the rest of the world

An economy that grows slowly and lives on consumption

In 2024, Romania's economy grew by just 0.9%a modest pace, comparable to that of the euro zone. Growth did not come from investment or exports, but almost exclusively from consumption.

Higher wages, recalculated pensions and various support schemes pushed the population's spending up. Investments, on the other hand, fell sharply (-12%) amid high interest rates, political uncertainty and delays in attracting European funds.

In other words, Romania ate more, but built less.

Firms: little investment, much caution

Non-financial companies have, as a whole, reached a fragile position. The business sector has a required net of financing – i.e. he borrows more than he saves – equivalent to 1.8% of GDP.

An interesting signal, however, is the extreme caution: firms strongly increased bank deposits and investments in government securities, while productive investments were postponed. In an uncertain economy, cash and the state became the refuge.

The level of corporate indebtedness remains relatively low (29% of GDP), but the increase in trade credits between companies suggests liquidity tensions and mistrust.

Banks and the financial system: stable, but increasingly linked to the state

The financial sector continued to grow and reached an all-time high in assets. Banks remain the main channel through which money flows in the economy, and the system is sound.

However, it is clearly visible growing rapprochement between banks and the state. A growing part of bank assets are government securities. For banks, they are safe and profitable. For the economy, however, that means less money going into private investment.

It's a delicate balance: financial stability, but risk of “investment laziness”.

Population: the great silent creditor of the economy

Perhaps the most important conclusion of the report is the role of households. The population is the main net creditor of the Romanian economy.

Romanians save massively: population deposits represent over 40% of total bank deposits. At the same time, household debt remains moderate, and the currency risk is limited, because most loans are in lei.

In the long run, however, an uncomfortable question arises: where does this saved money go? Mostly in financing the state, not the productive economy.

The state: the big consumer of money

Public administration is the biggest “sucker” of resources in the economy. In 2024, the budget deficit rose to 9.3% of GDPa level close to that of the year of the global financial crisis.

The state spends much more than it collects, and the difference is covered by borrowing – internal and external. Practical, the savings of the population and the banks end up, in one form or another, financing the public deficit.

The rest of the world: Romania remains dependent on foreign capital

Another constant is the dependence on external funding. “The rest of the world” remains one of the biggest creditors of the Romanian economy. The trade and budget deficits translate, in the end, through the continuous need for money from outside.

Why does this all matter?

Financial accounts are not just statistics. They show the resilience structure of the economy.

Romania has a population that saves, stable banks, prudent companies, but also a highly indebted state and weak investments.

In the short term, the system holds up. In the long term, however, the key question remains:how do you turn saving into investment and consumption into sustainable growth? This is, in fact, the real stake of the figures in the BNR report