Romania's public debt is estimated at 61.6% of GDP in 2026, will rise to 63.4% of GDP in 2027 and is projected to reach around 90% of GDP in 2036, according to the Convergence Report for 2026, published on Wednesday by the European Commission.
'The public debt-to-GDP ratio increased from 54.8% in 2024 to 59.3% in 2025 and is estimated to reach 61.6% in 2026 and 63.4% in 2027, amid a high primary deficit and rising interest payments. Risks to public debt sustainability appear elevated in the medium term, with debt projected to grow rapidly, to around 90% of GDP in 2036,' the report says.
In light of the assessment of legal compatibility and the fulfilment of the convergence criteria, as well as taking into account other relevant factors, the Commission announced on Wednesday that it does not consider that Romania meets the conditions for adopting the euro.
The report points out a series of incompatibilities related to the independence of the central bank or its integration into the Eurosystem.
Also, according to the European Commission, Romania does not meet the criterion on price stability. The average inflation rate in Romania in the 12 months to May 2026 was 8.4%, well above the reference value of 2.7%.
'It is projected to decline in the second half of 2026, but will remain significantly above the reference value until the end of the year. It is also projected to continue to decline in 2027, but will remain above the reference value until the end of that year,' the report said.
The Commission's Spring 2026 Economic Forecast projects that the average annual inflation rate will increase slightly, to 7.0%, in 2026 and then decline to 3.7% in 2027.
The European Commission report also indicates that Romania does not meet the criterion on public finances, the country being the subject of a Council decision on the existence of an excessive deficit. The general government deficit improved from 9.3% of GDP in 2024 to 7.9% in 2025, but remained well above the treaty reference value of 3% of GDP.
'This improvement was due to more efficient tax collection and the adoption of two major fiscal consolidation packages in 2025, which together had an estimated impact of around 3.7 percentage points of GDP through revenue increases and expenditure reductions. The Commission's 2026 spring economic forecast projects the general government deficit to decline to 6.2% of GDP in 2026, reflecting the full-year effect of the fiscal adjustment measures adopted in 2025, as well as additional revenues raised in 2026 through VAT and excise duty increases, dividend tax increases, property tax changes and broadening of the healthcare contribution base, together with tighter control of current expenditure. For 2027, the deficit is forecast at 5.8% of GDP,' the document states.
On 8 July 2025, the Council revised the fiscal adjustment path under the excessive deficit procedure (EDP), establishing that Romania must keep nominal net expenditure growth below 2.8% in 2025, 2.6% in 2026, 4.6% in 2027, 4.4% in 2028, 4.2% in 2029 and 4.0% in 2030. The deadline for correcting the deficit is 2030, when the revised recommendation of July 2025 foresees a deficit of 2.8% of GDP.
Regarding Romania's fiscal framework, the cited source emphasizes that significant deficiencies persist related to the appointment of Fiscal Council members and the management of public investments.
The European Commission also notes in the report that Romania does not meet the exchange rate criterion, as the Romanian leu does not participate in the Exchange Rate Mechanism II (ERM II). Romania employs a 'crawl-like' exchange rate regime, which allows for central bank interventions in the foreign exchange market. Exchange rate stability has been used by the National Bank of Romania (BNR) as a key mechanism to ensure financial stability and anchor inflation expectations.
Also, another observation is related to the fact that Romania does not meet the criterion on the convergence of long-term interest rates. The average long-term interest rate in the 12 months to May 2026 was 6.7%, well above the reference value of 5.1%.
The Commission also looked at other relevant factors, including balance of payments developments, market integration and the institutional environment. Romania's external balance (current account and capital account combined) improved slightly from -6.7% of GDP in 2024 to -6.0% in 2025, mainly due to better absorption of EU funds. The current account deficit, however, remained high, at 7.9% of GDP in 2025, the report highlights.
He also points out that indicators regarding the institutional environment show that Romania has weaker performances than many eurozone member states, especially in areas such as corruption control.
As for the banking sector, the document states that it is well integrated into the euro area financial system, in particular due to the high level of foreign ownership of banks. However, financing through capital markets is less developed, as reflected in the small size of private equity and bond markets.AGERPRES (RO - writing by: Nicoleta Gherasi; EN - writing by: Catalin Cristian Trandafir)
Romania's public debt will increase to 63.4% of GDP in 2027,will reach about 90% in 2036 (convergence report)
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