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Gov't passes public debt management strategy capping debt at 50pct of GDP


 Prime Minister Florin Citu says that a memorandum on the government public debt management strategy 2021-2023 was adopted at a Wednesday's government meeting, showing that the debt will stay capped at about 50% of the Gross Domestic Product (GDP).

"There are three scenarios there, I am using the most optimistic, but moving forward the debt stays at around 50% of GDP. (...) This scenario will happen. I showed last year, and this year as well, that you can to manage a difficult period without destabilising Romania's finance. It is a first, from my point of view, I think it has not happened in the last 30 years to have two years without any changes to the Tax Code, not a single thing changed in taxes, in taxation, no changes at all. As promised when I took over the finance portfolio in November 2019, I said that I will not raise taxes, nor will I get new taxes. We will be able to manage the economy because we want predictability; that's what people have asked us to do. You will see that this year will be the second year without any changes and we will do the same in the future," the prime minister told a news conference at the Government House.

According to the strategy, all 2020 risk indicators were within the limits established under the government public debt management strategy 2019-2021. In 2020, the gross financing demand at central and local governmental levels amounting to 149 billion lei were about 61.1% covered from internal sources and 38.9% from external sources.

The total volume of government securities issued on the domestic market was the equivalent of 91.4 billion lei, including government bonds denominated in euro to the tune of 2.3 billion issued on the domestic market and government securities intended for the population amounting to 6.5 billion lei.

According to the same source, the objectives of the Ministry of Finance in the management of government public debt in 2021-2023 remain similar to those provided by the previous strategy, namely: ensuring the necessary funds for the central public administration amidst minimising costs in the medium and long term; containing the risks related to the government public debt portfolio; developing a domestic market for government securities.