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Bond Market News
Romania Bonds Rally After Deficit Measure Announcement
July 4, 2025
Romania’s sovereign bonds extended their rally after the government unveiled a package of spending cuts and tax increases, aimed at narrowing the widest fiscal gap for any EU nation. These measures include raising the value-added tax and cutting public sector wages and would be presented at next week’s meeting of EU finance ministers. Investor sentiment improved as the government’s plan targets a reduction of the deficit by about 1.2% of GDP this year, with further cuts planned through 2026, as per Bloomberg.
Following the improved market sentiment, Romanian finance ministry issued a total of 3bn lei ($700mn) in domestic bonds maturing in 2027 and 2034, three times the initial offer size. Romania’s bonds have historically traded at a higher risk premium compared to other European peers, due to concerns about the country’s fiscal trajectory and the potential for a credit rating downgrade.
Romanian dollar bonds have trended higher across maturities, as can be seen in the chart above.
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