Romania is in 30th place in a list published by Ziad Daoud, Bloomberg’s chief economist for emerging economies, which refers to the danger of bankruptcy of emerging countries.
Although it has a GDP of 250 billion dollars, Romania is in the top cited in a danger of bankruptcy – “default”, in the terms of economists – higher than Iraq, a 170 billion dollar economy ground by war.
According to the author’s data, which include International Monetary Fund (IMF) estimates and a Blomberg index on the cost of financing, Romania will reach a public debt of 56% of GDP in 2022 and will pay 1.6% of GDP with interest. At 5 months from 2022, Romania has paid over 2 billion dollars in interest, i.e. 0.8% of GDP, according to the budget execution.
The most vulnerable emerging economies
At the same time, Poland, an economy of 500 billion euros annually, is in the top 43rd place, and Hungary 28th, so in greater danger of defaulting than Romania.
The most vulnerable emerging economies in terms of public debt are El Salvador and Ghana. With interest on financing of 32%, El Salvador, according to the author’s data, has a public debt of 83% of GDP and spends almost 5% of GDP annually on interest. Among the countries that are in danger of bankruptcy are Tunisia, Pakistan, Egypt or Kenya.
The top analyzed 50 countries with emerging economies that, following the analysis based on financing costs, interest paid and the size of the public debt, are in the greatest danger of default.
On the 49th and 50th places are Saudi Arabia and Kuwait. Saudi Arabia has a public debt equivalent to 24% of GDP, and Kuwait to 12% of GDP.