In its latest report on the financing needs of the four largest economies in central and eastern Europe, Fitch said the Romanian government will need EUR3.1 billion to finance the budget deficit in 2014.
Additionally, the country requires another EUR7.8 billion for medium- and long-term redemptions and EUR2.2 billion for short-term debt stock.
Romania must also repay EUR1.2 billion in previous financial assistance from the International Monetary Fund and the European Union in 2014, Fitch said. If the installments owed by the central bank are taken into account, the figure increases to EUR4.6 billion.
To date, the authorities have already pre-financed 17% of the total funds needed this year, Fitch said.
Fitch estimates the CEE-4 countries of Poland, Hungary, the Czech Republic and Romania will need to borrow EUR78.5 billion in 2014 to finance planned central budget deficits and debt redemptions.
“This is equivalent to 9.5% of aggregate projected GDP in 2014, considerably lower than 15.1% for the eurozone as a whole and down from 12.4% in 2013,” the report noted.
The rating agency said Romania, alongside Hungary and Poland, has taken advantage of benign financing conditions to issue euro and US dollar bonds recently.
So far in January, Romania sold debt in local currency worth around RON4.83 billion (EUR1.06 billion), up from RON4.03 billion initially targeted. Also this month, the country sold $2 billion in 10 and 30 year US dollar-denominated bonds in international markets and raised another EUR278.7 million at a Eurobond sale on the local market.
Fitch noted that non-resident investors increased their holdings in leu-denominated government securities to 22% at the end of October 2013, from 5.6% in September 2012. However, the share is below the 40% level in Hungary and 33% in Poland, the report showed.
“Fitch does not expect large changes in non-resident holdings in the near term. However, a more pronounced outflow from emerging markets could prompt an exit from CEE-4 positions by non-resident investors,” Fitch said.