Rapidly increasing public debt in Romania remains below the European Union's overall average level.
In the first quarter of 2025, the European Union (EU) witnessed a varied landscape of public debt-to-GDP ratios among its member states. The countries with the highest ratios were Greece (152.5%), Italy (137.9%), France (114.1%), Belgium (106.8%), and Spain (103.5%). On the other hand, the countries with the lowest ratios were Bulgaria (23.9%), Estonia (24.1%), Luxembourg (26.1%), and Denmark (29.9%).
Among these, Romania stood at 16th place with a public debt-to-GDP ratio of 55.8%, which is below the EU average of 81.8%. However, Romania's public debt is growing faster than the EU average, with an increase of 4.1 percentage points compared to Q1 2024, while the EU average increased by only 0.2 percentage points.
Romania's rapid debt growth places it third in the EU in terms of growth compared to the first quarter of last year. Interestingly, twelve Member States of the EU registered a decrease in their debt-to-GDP ratio at the end of Q1 2025.
Italy follows closely behind Romania with the second-highest public debt ratio to GDP at 137.9%. This growth in debt levels highlights the challenges these countries face in managing their economies amidst ongoing recovery efforts from the COVID-19 pandemic and other economic pressures.
While Romania's public debt growth is a concern, it is important to note that the EU average public debt ratio is still significantly higher than that of some member states, such as Estonia (24.1%) and Denmark (29.9%). This underscores the importance of prudent fiscal management and responsible borrowing practices for all EU member states.
[1] European Commission, "EU27 government debt as percentage of GDP Q1 2025," accessed on 2025-05-01. [3] European Commission, "EU27 government debt as percentage of GDP Q1 2024," accessed on 2025-05-01.
The rapid debt growth in Romania, placed third in the EU in terms of growth compared to the first quarter of last year, raises concern within the industry finance sector, especially given the country's 16th place ranking for public debt-to-GDP ratio among EU member states in Q1 2025. Meanwhile, several EU member states, including Estonia and Denmark, registered a decrease in their debt-to-GDP ratio, emphasizing the necessity for responsible borrowing practices to ensure a balanced EU economic landscape.
