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BNR: financial assets of the public administration sector, up 3.6 percentage points in Q4 2020
The financial assets of the public administration sector, expressed as a share in the Gross Domestic Product, increased by 3.6 percentage points, reaching 26%, according to the data of the National Bank of Romania (BNR).
Financial assets of the public administration sector, expressed as a share of Gross Domestic Product, increased by 3.6 percentage points to 26%. The public administration's deposits and cash increased by 2.1 percentage points in the fourth quarter of 2020, mainly as a result of the loan taken out by Romania through the SURE2 program and of the issuance of new debt securities, compared to the same quarter of the previous year and represented 5.6% of GDP. Holding shares and other state participations decreased by 0.1 percentage points, reaching 9.9% of GDP, and the position of 'other accounts receivable' (taxes, duties, social contributions, trade receivables, amounts owed by economic agents to public authorities and external receivables) increased by 1.4 percentage points, reaching 7.6% of GDP in the fourth quarter of 2020, a strong impact coming from the registration of deferred taxes that the state is to receive, the BNR shows.
According to the quoted source, the balance of financial liabilities of public administration increased more sharply than that of financial assets.
Thus, the financial commitments of the public administration represented in the analyzed quarter 59.2% of the GDP (by approximately 15 percentage points more than in the fourth quarter of 2019). This increase is largely explained by the evolution of debt securities issues in lei and in foreign currency, both for financing the budget deficit and for refinancing the public debt.
In the fourth quarter of 2020, this debt instrument accounted for 43.5% of GDP, by 11.7 percentage points more than in the same period of the previous year. One event that contributed to this growth was the issue of Eurobonds, launched by the Ministry of Finance on November 24, 2020.
The BNR mentions that the total value of this issue was 2.5 billion euros, with a final subscription of 11.6 billion euros, thus highlighting an increased interest of investors. The balance of loans committed increased by 1.9 percentage points in the analyzed period, reaching 6.7% of GDP, mainly as a result of the loan taken out by Romania through the SURE program, and the elements in the category of other amounts payable increased by 1 percentage point, up to 7.9% of GDP.
The social security administrations had a financing need of 0.3% of GDP in the fourth quarter of 2020, while in the fourth quarter of 2019 they registered a financing capacity of 0.4% of GDP.