Page 75 - Central & Southeast Outlook 2020
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4.8 Debt - Montenegro
Although the government in Podgorica is actively managing public debt, its liabilities remain highand the €500mn Eurobond it has sold in 2019 is expected to push public debt up to an estimated 78.6% and public and publicly guaranteed (PPG) debt to an estimated 83% by the end of 2019. In 2020-2022, the government has set as its goal to reduce public debt to 63% of GDP.
The public debt stood at €3.13bn at the end of September 2019, equalling 64.93% of the projected full-year GDP forecast, according to the latest finance ministry data. At the end of 2018, the public debt was equal to 70.1% of GDP.
Montenegro’s foreign debt was €2.62bn. China’s Exim Bank, which has lent the country most of the funds needed for the construction of the Smokovac-Matesevo highway, remained the largest creditor at the end of September 2019 with the debt totalling €652mn. The debt to the International Bank for Reconstruction and Development (IBRD) totalled €186.88mn. The debt to the European Investment Bank (EIB) stood at €110.59mn and debt to the Paris Club of creditors totalled €78.56mn.
The country also has Eurobonds worth €1.05bn. In September 2019, Montenegro successfully placed a €500mn ten-year Eurobond issue at an interest rate of 2.55%, to be used to refinance public debt.
4.9 Debt - Romania
The European Commission forecasts that Romania’s debt-to-GDP ratio will rise from 35.0% in 2018 to 40.6% in 2021.
Finance Minister Florin Citu told Bloomberg in December that Romania will tap international markets “in the first part of next year [2020],” since its financing needs are safely covered by the internal market where there is a strong demand for state bonds at this moment.
Citu added that Romania has an “optimum size buffer” to face any funding or exchange-rate pressure and announced yet unspecified measures to bring the budget deficit down to around 3% of GDP.
bne IntelliNews columnist Alex Tanase pointed out in November that while Romania is not yet a highly indebted nation by international standards, the country’s debt has been rising steadily. “During the last three years alone total foreign debt increased by €16bn from €92.9bn as of end-2016 and most of it
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