Romania plans to return to international bond markets only after its presidential elections in May and the introduction of new fiscal measures aimed at reducing the European Union’s largest budget deficit, according to Treasury Head Ștefan Nanu.

Speaking at the IMF Spring Meetings in Washington, Nanu said Romania has already secured about 42% of its 2025 funding needs. This is based on the government's current deficit target of 7% of GDP. So far this year, the country has raised €8.5 billion ($9.6 billion) in foreign currency debt.

To ease pressure on bond yields, Romania will also look to diversify its funding sources. This includes private placements and off-market loans, which could reduce the need for further large-scale eurobond issues.

“The next public eurobond will come only after the elections and once the new government outlines its fiscal measures,” Nanu said. “That’s what markets and rating agencies are waiting for.”

The upcoming presidential re-run on May 4, triggered after the top court annulled last year’s election, has created political uncertainty. This has further complicated efforts to bring down the deficit. Concerns are that a win by a far-right or independent candidate could lead to a new, potentially unstable governing coalition.

In the first quarter of 2025, Romania’s budget deficit widened to 2.3% of GDP, higher than last year's first quarter, raising concerns over the government’s ability to meet its 7% target.

“It's clear that additional measures are needed since current budget execution doesn’t align with our deficit target,” Nanu noted.

On a positive note, the Finance Ministry has seen strong demand for retail bonds. It may increase its annual issuance target for these instruments from 45 billion lei to 60 billion lei ($13.7 billion).

Despite ongoing fiscal challenges, Romania is expected to remain one of the region’s largest sovereign borrowers, with plans to raise €13 billion from international markets this year, following a record €18 billion issuance in 2024.