Romania, dependent on loans. Analyst: “It's not bad, but it depends on what we're doing it for”

Romania is still dependent on loans, needing around 52 billion euros this year alone, but the fact that we borrow money is not bad, as long as it is used “with care”, as explained by the analysts consulted by “Adevărul”.

Romania is, for now, dependent on loans. Photo by Shutterstock

Asked how he sees the criticism brought by Nicolaie Alexandru Chidesciuc, managing director at JP Morgan, who said that Romania borrowed more than Saudi Arabia, as if it did not have an investment grade rating, analyst Silviu Gresoi told “truth” that Romania's problem is no longer just the level of interest rates, but the way our fiscal behavior looks, in black and white.

“We are coming after a deficit of about 9.3% of GDP in 2024, the highest in the EU, and a deficit of about 7.6% in 2025, i.e. more than 140 billion lei spent in excess of what we collect in a single year. At the same time, public debt has risen rapidly to 55-60% of GDP, and even the official seven-year adjustment scenario accepts a temporary move above 60% to close to 2030.

Markets are not looking at slogans or even just the rating label, but the trajectory of deficits and debt. Romania is still investment grade on the last step, with a negative outlook, that is, exactly on the verge of losing this status.

In this context, the fact that JP Morgan talks about a possible deficit of 'maximum 6% of GDP in 2026' means only a correction compared to previous election years, not a return to a comfortable zone. As long as deficits remain close to double the European threshold of 3% and public debt remains on an upward trend, the markets will continue to charge us a high risk premium and interest rates as if we were already beyond investment grade.

The financing cost will start to decrease only when the fiscal consolidation will no longer be a plan on paper, but a repeated, verifiable behavior in the budget execution, year after year”, explained Silviu Gresoi for “truth“.

Negrescu: It depends a lot on what the money is spent on

Answering the same question, analyst Adrian Negrescu declared, for “Adevărul”, that “the idea that we borrow is not a bad one, but it depends on what we do it for”.

He explained that, in 2026, the state proposed to take loans of 52 billion euros to cover the need to finance pensions, salaries, investments, etc. and, perhaps most importantly, to pay the public debt whose bill this year exceeds 30 billion euros.

“With us, given that over 90 percent of the budget goes to salaries and pensions, we have fixed expenses that we have to finance. We are very lucky with the European funds, which have come to represent almost 90% of the money for investments. Otherwise, if it were not for this money, the investments in Romania would have been equal to zero.

All these things are known to investors who know the financial situation of the state, they know how difficult it is to collect taxes and what massive funding needs we have. Hence the rather high interest rates we pay.

The good news is that interest rates have decreased, they are at the lowest level in the last 2 years, and this is due to the fact that the Government implemented austerity measures and, thus, we lowered the budget deficit”Negrescu declared for “Adevărul”.

“We must have governors capable of restructuring public spending”

According to the analyst, if Romania follows this path, surely the country's risk premium, which is reflected in interest rates, will also decrease.

“We must understand that the interest at which our country borrows is further reflected in the costs of loans taken by companies and the population, in inflation, including in the intragroup financing costs of companies.

That is why it is essential that in the coming years we have rulers capable of taking decisions to restructure public spending, to optimize the collection of money from fees and taxes, to support the economy. This is to collect more money for the budget and thus be able to reduce the level of loans, to be able to roll over the public debt at lower costs in the future.

And if we have to borrow, we do it not for current expenses but for investments, those that can bring us jobs, business chains, higher budget receipts in the future“, said Negrescu.

He recalled that there are some who say that Romania's debt is still small, up to 60%, so we have room to borrow: “What they don't understand is that creditors look primarily at the ability of the economy to pay debts, and we unfortunately have a fragile business ecosystem, with taxes and fees lower than the EU average. In other words, we are not that “solvent” when it comes to borrowing.

In other words, in the next 5 years we have to see reforms because, if we don't do them, we will pay for them big and fat through higher fees and taxes that will turn our lives upside down”.

JPMorgan: Romania borrows more than Saudi Arabia

We remind you that, recently, Nicolaie Alexandru Chidesciuc, managing director at JP Morgan, stated that Saudi Arabia borrows very large amounts from foreign markets, but in 2024 it was overtaken by Romania in this regard.

“I'm going to give you some figures, although I didn't want to. Speaking of dependence on the foreign market, Romania borrowed about 19 billion euros in 2024. It's practically the largest loan of all emerging countries – no one has borrowed such an amount before. In 2025, Romania borrowed 18 billion euros, much more than Poland or Turkey. In 2024, we borrowed more than Saudi Arabia, which borrow very large amounts”explained Chidesciuc.

He is of the opinion that Romania clearly has a problem with the fiscal deficit, which also led to the current account deficit. “Therefore, this fiscal problem needs to be solved. The government is moving in this direction, but more is needed“, believes the banker from JP Morgan.

Two weeks ago, the Minister of Finance, Alexandru Nazare, announced that the budget deficit will decrease to 6% this year, and the costs at which Romania borrows have reached the lowest level in recent years, because “Romania won the trust of the European Commission and managed to renegotiate the PNRR”.