Finance Ministry’s financing needs in 2019: RON 72bn

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The figures presented by the Ministry of Public Finances (MFP) reveal that the financing needs this year amount to RON 72 billion, i.e. about EUR 15 billion, so that the state would have to borrow from the domestic and international markets some EUR 1.2 billion per month.

The amounts result from the scheduled budget deficit of 3%, i.e. RON 28 billion, informs, quoted by Next come RON 44 billion, the level of debt to be refinanced this year.

Of concern is the fact that the budget deficit is growing, but the money is not used for public investments, modernization is missing, reads.

The Finance Ministry’s document reads that the state will borrow from the domestic market some RON 50 billion. For comparison, in 2018 the level was of RON 48 billion, so this year the amount is higher by RON 2 billion. Most of the loans come from the banking market, only RON 1.4 billion come from bonds sold to the population this year.

Therefore, domestic financing depends on the banks.

For 2019, the state wants to borrow from foreign markets EUR 4.25 billion. Last year the level was EUR 4.95 billion, thus a slight decrease this year. The loans are due on long term, of up to 30 years. The strategy allows for refinancing the debts over long term, but there is a negative size, i.e. the interest rates are higher.

The Finance Ministry says in the document that the level of State Treasury reserve is to be maintained at EUR 5 billion.

MFP borrowed on Monday RON 500 million from banks, through a benchmark government bond issue with a residual maturity of 83 months, at an average yield of 4.72% per annum.

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