Romania was borrowing at 45,000 euros (or nearly 230,000 Romanian lei) per minute in 2025, public debt crossed the 60 percent threshold of gross domestic product (GDP) for the first time, inflation is close to 10 percent, and the economy has entered a technical recession, local media have reported in recent days, BTA writes.
Data from the Ministry of Finance, released yesterday, showed that in November 2025, Romania's public debt exceeded the requirements in the European Union treaties of a threshold of up to 60 percent of GDP, amounting to 1,121.44 billion lei or 60.2 percent of gross domestic product. This is more than twice as much as in 2020, when the debt amounted to 498.57 billion lei, the newspaper “Adeverul“ points out, commenting that “Romania is borrowing at the fastest pace in the EU simply to survive“.
According to data from the European Commission, the countries with the highest debt-to-GDP ratio in the third quarter of 2025 are Greece (149.7 percent), Italy (137.8 percent), France (117.7 percent), Belgium (107.1 percent) and Spain (103.2 percent). The countries with the lowest debt are Estonia (22.9 percent), Luxembourg (27.9 percent), Bulgaria (28.4 percent) and Denmark (29.7 percent).
Romania's accelerating rate of indebtedness, which is focused on consumption and wages rather than investment, is turning public debt into a major burden for future generations, local analysts warn.
At the same time, the National Institute of Statistics announced that the Romanian economy has fallen into a technical recession - a state in which GDP registers a decline in real terms for two consecutive quarters compared to previous periods. In the fourth quarter of 2025, gross domestic product was 1.9 percent lower in real terms compared to the third quarter of 2025, the second consecutive quarter of decline, according to Romanian statistics.
Inflation remains high - over 9 percent, and according to local experts, this is mainly due to the increase in value added tax (VAT) and excise duties from August 1 last year.
In August, the annual inflation rate reached almost 10 percent, or more precisely 9.9 percent, compared to 7.84 percent in July. In January this year, the annual inflation rate was 9.62 percent, according to data from the National Institute of Statistics.
Back in the summer, the governor of the National Bank of Romania, Mugur Isserescu, predicted this spike in inflation. “It takes 12 months for the consumer price index to reflect the magnitude of some supply-side shocks”, explained Mugur Isserescu. At the time, he also said that Romania could avoid recession if it increased the absorption of European funds and investments financed with European money.
Bucharest relies heavily on EU funds, including those from the Recovery and Resilience Plan, which ends in August 2026. However, many reforms are delayed, leading to a loss of funding. For example, in October last year, Bucharest agreed with Brussels a revised version of the National Recovery and Resilience Plan (NRRP), from which reforms and investments worth 7 billion euros were effectively dropped. The Minister of European Funds, Dragos Păslaru, admitted that the country is counting on the remaining funds under the plan, as well as about 5 billion euros from the cohesion funds in the next period.
At the beginning of the month, however, Păslaru announced that Romania is losing another 231 million euros under the NPL due to the unfulfilled requirement regarding the pensions of magistrates. The implementation of this reform has been delayed due to a series of postponements of a decision by the Constitutional Court, which is to rule on the constitutionality of the adopted regulatory act.
The coalition government of Ilie Bolojan has already approved two packages of budgetary and fiscal measures to control the excessive budget deficit, which in 2024 reached the highest level in the EU of 9.3 percent. Salaries and pensions were frozen, bonuses and other incentives were eliminated, excise duties and taxes rose, and reforms were undertaken in state-owned companies and regulators. The government is preparing to push through a third package of austerity measures, which includes spending cuts in public administration.
According to data from the Ministry of Finance, Romania ended 2025 with a budget deficit of 7.65 percent of GDP, and this year it has set a goal of reducing it to 6 percent.
In the medium term, according to the 7-year fiscal plan under the excessive deficit procedure, Romania has set a trajectory for reducing it to around 2.4 percent of GDP by 2031.
According to JP Morgan economist Nicolae Alexandru-Gideschuk, Romania could achieve a budget deficit of 6 percent in 2026 if the fiscal measures already adopted are fully implemented and public spending is kept under control.
However, the budget deficit, financed through loans, is leading to Romania's accelerated indebtedness, and analysts warn that at this rate, the debt could jump to 70 percent of GDP in the next 3-4 years. According to experts, Romania borrows at interest rates similar to those of France, which shows a tendency towards unsustainability and affects Romanians through persistently high inflation.
„We have reached a public debt of 60 percent of GDP and it will continue to grow because the deficits are very large. The budget deficit is added to the public debt because it is financed through bond issues, that is, through loans with a limited term. "Within 3-4 years, we will reach a debt of 70 percent of GDP with these deficits that we have," economist Adrian Codărlașu told the newspaper "Adeverul."
He pointed out that this increase in debt will affect Romanians by increasing inflation.
Economic analyst Adrian Negrescu commented to Digi 24 that, against the backdrop of the economic slowdown, debt repayment is becoming a big problem, since in 2026 alone Romania will have to pay 30 billion euros into the debt account, which is growing every month.
Economist Ionut Dumitru, who is an honorary advisor to Prime Minister Ilie Bologian and former chairman of the independent advisory body Fiscal Council, explained to Digi 24 last week that due to Romania's huge deficits and lowered credit rating the country spends over 3 percent of its GDP on interest on loans alone.
Adrian Negrescu reminded that Romania continues to borrow, mainly to cover the current expenses of the state.
„We are in a lot of debt, unfortunately not for investments, but for pensions, salaries and other social expenses, while the interest rates on the loans that Romania takes out continue to be very high“, he pointed out.
According to Negrescu, investors are watching Romania's public debt with concern because other countries with high debt, such as Germany, France, Italy, etc., have the capacity to repay it.
„We, unfortunately, have a rather fragile economy that is dependent on consumption (…)“, Negrescu noted to the "Adeverul" newspaper.
According to him, the solution is to reduce state spending and restructuring of the state apparatus.
Analyst Silviu Gresoi told the same publication that increased debt does not automatically mean a crisis, but is a serious signal of alarm.
„If we analyze the situation, we can conclude that it is not the value that scares the markets, but the speed with which the debt has grown and the fact that this comes in a package with very high budget deficits. Romania has jumped from its comfort zone to this 60 percent threshold in a very short period of time, and this calls into question its medium-term sustainability," Gresoi said, quoted by "Adeverul."
Romania's seven-year budget deficit reduction plan foresees an increase in public debt to 62.6 percent of GDP by 2029. Current estimates, however, show that this level will be exceeded much faster, given that the plan envisaged public debt reaching 55.7 percent in 2025 and 58.5 percent of GDP in 2026. values that were already exceeded, notes "Adeverul".
Economic analyst Janku Guda wrote on his Facebook profile that at least half of the increase in public debt over the last five years (2020-2025) went to salaries and pensions, or 66 percent to be exact. He noted that another 18 percent went to goods and services, while only 12 percent of the increase in public debt went to increase investments financed by national funds, specifying that those financed by European funds and the National Recovery and Resilience Plan are not taken into account, because they do not generate public debt.
“To understand the seriousness of the situation: public debt has increased in the last 5 years (2020-2025) by approximately 800 billion lei, which is almost twice the increase in public debt in the previous 30 years (1989-2019)“, Guda wrote on his Facebook page.