Hungarians are better off than Romania. The information that gives has come

Romania is seen as a riskier country even than Hungary. This despite the fact that Budapest has often had controversial policies in the EU, especially regarding the situation in Ukraine.

Romania, the highest financing cost in the EU

Today, Romania faces the highest cost of financing among the countries of the European Union, surpassing even Hungary, traditionally considered one of the riskiest countries in the EU due to its policies. Romanian government bonds with a maturity of 10 years record a yield of 6.89%, according to the investing.com platform, reflecting a significant increase in borrowing costs for the Romanian state.

The budget deficit stands out as the main factor generating this increase in financing costs. Budget expenditures, including those for services, salaries, and pensions, exceed state revenues, and spending increases are higher than budgeted. This situation leads to a deterioration of Romania’s credibility on international markets and an increase in the yield of government bonds.

Although revenues are rising, they are not enough to cover spending, leading to a growing budget deficit and declining investor confidence. Compared to Hungary, Romania is now perceived as a riskier investment, despite the fact that Hungary traditionally has a higher risk premium.

In the context in which foreign investors perceive us as a country with a higher degree of risk than Hungary, the pressure on financing costs can be accentuated.

The analyzes show that, if measures are not taken to reduce the budget deficit, financing costs could continue to rise, affecting the country’s economic stability in the long term, reports alephnews.ro.

Government debt rose to 52.4% of GDP in February

The latest data published by the Ministry of Finance show that the government debt rose, in February 2024, to 841.292 billion lei, from 801.687 billion lei in the previous month. As a percentage of GDP, government debt rose to 52.4% from 49.9% in January.

In the second month of the year, the medium and long-term debt increased to 786.851 billion lei, from 759.95 billion lei in January, and the short-term debt increased to 54.441 billion lei, from 41.737 billion lei in the previous month.

The largest part of this debt, namely 687.897 billion lei, was represented by government securities. The loans amounted to 140.163 billion lei.