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January 27, 2022

Moody’s: Government to borrow more than in 2011

The Romanian government has a financing need of EUR 17.2 bln this year compared to EUR 17.6 bln last year, Mediafax informs. Nevertheless, the state will borrow a total of EUR 18 bln in 2012 and will create a reserve of EUR 800 M, Moody’s credit rating agency estimates. While the sums needed to cover the budget deficit drop from EUR 6.2 bln to EUR 3.6 bln, the government will need more money for debt servicing (including the short-term debt). Thus, the financing need for debt servicing will grow from EUR 11.4 bln in 2011 to EUR 13.6 bln this year. The government will register the highest expenditures in what concerns internal market debts (EUR 12 bln compared to EUR 10.7 bln last year), while the sum needed to finance the servicing of external debt will grow from EUR 700 M to EUR 1.6 bln. “Governments sometimes “over-finance” themselves in order to have a reserve for unexpected needs at times of uncertainty,” Moody’s analyst Atsi Sheth pointed out. The main source of financing will continue to be the internal market this year too, through the issuance of financial instruments whose value will go from EUR 13.5 bln to EUR 13.7 bln, Moody’s analysis shows. The government will also hike the sums it borrows from external markets, from EUR 4.1 bln to EUR 4.3 bln. While loans from multilateral and bilateral sources will drop from EUR 2.6 bln in 2011 to EUR 1.8 bln, the value of financial instruments issued on external markets will grow from EUR 1.5 bln to EUR 2.5 bln.

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