Bucharest, August 17, 2025 – RBJ – For several weeks, the PM of Romania, Ilie Bolojan, a former mayor of a provincial town and without any macroeconomic training, has been throwing all kinds of rhetorical figures left and right regarding a possible economic disaster for the country. In an interview given last week to Bloomberg, Ilie Bolojan said: “The risk of default is really high after years of high deficits. If we do not follow a stable trajectory, the only possible outcome will be a very serious one”.
Alarmist words, which would put anyone in a state of caution or alarm. But the PM does not bring any plausible argument. Neither Romania’s external debt, of approximately 55%, nor the inflation rate, the highest in the EU, are indications that the Romanian economy is in danger of default. Poland, which for years in a row had an external debt of over 65% and a deficit level sanctioned by the EU, has not expressed its “pain” in the way that the head of the government in Bucharest is doing today.
The proof that the state of the Romanian economy is not very bad is also confirmed by some specialized international organizations. The international financial rating agency Fitch reconfirmed, on Friday, Romania’s sovereign rating at BBB-/ .
The PM’s blabbering is determined by his unpopular initiatives, at the instigation of some malicious individuals and without economic scope. It is a set of austerity measures supported mainly by employees and pensioners.
To show the true state of affairs regarding Romania’s macroeconomics, we are resuming part of the analysis published by the Mediafax agency by Cristian Socol, professor of macroeconomics at the Academy of Economic Studies in Bucharest. Cristian Socol participated in the development of the Government Programs of 2008, 2012, 2016, the presidential programs of 2009, 2014 and the European Parliament programs of 2009, 2014, 2019. He is the author of hundreds of substantiated public policy proposals.
So, what does Prof. Cristian Socol say? “Labels such as “Apocalypse”, “Disaster” or “Insolvency”, periodically launched by high-ranking officials, do not replace coherent public policies and do not bring any benefit to the population or companies. Invoking the “heavy legacy” has almost no effect on economic perception and expectations,” Socol argues.
“Alarmist statements directly affect stimuli regarding consumption, investments and savings,” Socol explains. In the context of fiscal-budgetary consolidation and high uncertainty, exaggerated information reduces economic growth, hinders investments and limits job creation, which leads to a decrease in the well-being of the population.”
And Cristian Socol adds:”The political game with terms such as “entering into insolvency” has no rational basis. Romania, even in a process of fiscal-budgetary consolidation, is not in the situation of Greece and there are no risks of fiscal insolvency. Erroneous statements from this perspective can cause unjustified panic and economic destabilization.”
“Romania cannot and will not end up in the situation of Greece. Despite the fiscal sustainability issues discussed, the Romanian economy has sufficient resources and mechanisms to avoid a solvency crisis scenario.”
Inability to pay actually means entering a liquidity crisis – an external default and major difficulties in securing the financing needs domestically. Romania, says Prof. Cristian Socol, is not even at such a risk and here is why:
1. Romania’s financing needs for 2025 are largely covered. A simple question to the Ministry of Finance (or a detailed analysis of public information) could bring to light the reality – Romania initially announced a financing need of 231.6 billion lei for 2025, i.e. 12.2% of GDP (of which 58%, i.e. 133.3 billion lei, to cover the current budget deficit and 42%, i.e. 98.3 billion lei, to repay the capital installments – related to the rolling over of the latter debt).
At the present time, 190 billion lei out of the 231.6 billion lei of the total initial financing needs are covered, i.e. 82%. Of course, you will say and I agree that it is impossible for the Government to reach the initially committed deficit of 7% of GDP and that it will rather go towards 8.2-8.6% of GDP, as estimated by the European Commission in the latest forecast.
If we take into account this negative scenario, it means that Romania will have to supplement the financing needs up to an estimated 252-260 billion lei this year. This means that at this moment we have covered three quarters of the financing needs, which is a good percentage and shows the professionalism of the treasury management team in the Ministry of Finance. Romania’s financing is predictable and consistent, there will be no liquidity gaps.
2. Romania has a consistent buffer in the treasury. The financial reserve for difficult times on international financial markets ensures between three and a half months of coverage of the supplemented financing needs and 4 months of the initial financing needs. This means that we meet the adequacy criterion recommended by the International Monetary Fund – “The Treasury buffer should cover 3-4 months of annual gross financing needs”. In absolute terms, the buffer is 3 times higher than it was at the end of 2021.
3. Currently, Romania has international foreign exchange reserves at the NBR (gold and currencies) of 72.9 billion euros, +62% compared to the level of 45 billion euros at the end of 2021. Monetary and exchange rate policy actions have allowed for a relatively stable exchange rate for the leu, despite the extremely high uncertainty in recent months (from political instability to instability generated by the border war, trade war, etc.). In addition, the international reserves adequacy indicators are within the reference ranges recommended by the IMF.
4. Romania has remained on economic growth. Romania has not even entered the so-called “technical recession”, let alone a deep recession. A few days ago, the INS and Eurostat announced the latest signal figures on the evolution of the Romanian economy in the 2nd quarter of 2025 – Romania had the highest economic growth rate among EU countries in Q2 2025.
It is worth recalling here that Romania has remained on a sustained convergence trajectory in recent years, catching up with Poland in the GDP per capita indicator at purchasing power parity. In the last two years, according to Eurostat data, 10 EU27 countries have had an economic decline or/and technical recession.
Germany, Estonia, Austria and Finland in 2023 and 2024, the Czech Republic, Ireland, Luxembourg, Hungary and Sweden in 2023 and Latvia in 2024. Estonia, Ireland Latvia, Hungary, Malta, the Netherlands, Austria and Finland were in technical recession. Romania has remained positive and has been betting on an investment-based model for several years, which throws certain elements of sustainability into the future.
5. At the microeconomic level, the financial health of the population and companies has increased in recent years. Money has moved in the economy. From a value of population deposits of 278 billion lei at the end of 2021, it reached 390 billion lei in June 2025. Loans granted to the population also increased from 164 billion lei to 199 billion lei in the same period. Financial health has increased in the economy. Total indebtedness of companies and the population decreased from 53% to 44.2% in 2024 and the non-performing loan rate in the banking sector decreased from 3.35% to 2.41% at the end of last year.
We hope that the Prime Minister of Romania, Ilie Bolojan, will read this analysis by Prof. Cristian Socol and request his expertise on the future economic measures that the government in Bucharest will initiate.
