The Board of Executive Directors of the World Bank Group has approved a Development Policy Loan (DPL) to support the Romanian Government's efforts to strengthen fiscal sustainability, stimulate private sector development, and support job creation. This financing will contribute to opening new opportunities for citizens and companies, from easier access to finance for small businesses to the development of cleaner, more competitive industries and increased energy efficiency.
The USD 650 million loan (equivalent to EUR 544 million) comes at a critical time for Romania's economy. In 2024, the fiscal and current account deficits as a percentage of GDP were the highest in the European Union. The government has responded with a solid reform program aimed at bringing public finances back onto a sustainable path, while also laying the groundwork for stronger and more inclusive economic growth through a coherent and robust fiscal consolidation plan. This loan will support the continued implementation of the Government's reform agenda.
„”Romania has taken courageous and necessary steps to bring public finances back onto a sustainable trajectory, and the results are already beginning to show, with reduced deficits and lower financing costs,„ said Yasser El-Gammal, World Bank Country Manager for Romania and Hungary. "We expect these ambitious reforms to restore fiscal health, catalyze private investment and create jobs. This financing reflects our confidence in Romania's ongoing efforts and our solid, long-standing partnership with the Government."„.
The loan is structured around two main pillars. The first pillar aims to restore fiscal sustainability by addressing structural vulnerabilities in fiscal policy and public spending, with measures envisioned to support fiscal consolidation and achieve a deficit level of 3% of GDP by the end of 2030.
The second pillar focuses on stimulating private sector-led economic growth and job creation by reducing key constraints to investment and competitiveness, including through improving access to finance, supporting innovation and digitalization, and ensuring reliable and affordable energy.