Volodymyr Golovatiuc
The domestic public debt is growing at a faster pace than the total debt of the state. According to the Ministry of Finance, the change was mainly due to an increase in the issue of VMS on the primary market by 4,902.1 million lei at nominal value. As well as the issuance of VMS through the electronic platform eVMS.md for 360.3 million lei and the redemption of converted VMS for 443.4 million lei.
In the first 5 months of 2025, the weighted average interest rate on VMS circulating at auctions amounted to 8.86% (by type: 91 days – 3.02%, 182 days – 8.44%, 364 days – 9.47%, 1 year – 8.00%, 2 years – 7.82%, 3 years – 7.67%, 5 years – 8.50% and 7 years – 8.96%), up by 3.9 p.p. compared to 2024.
“The Ministry of Finance is not experiencing difficulties with the placement of government securities. Demand for government securities remains high, thanks to long-term securities. Therefore, I believe that in the future the demand for government securities will remain high, and the planned indicators of domestic borrowings will be exceeded at the end of the year, approaching the critical mark”, – says economist Vladimir Golovatiuc.
The growth rate of domestic government debt planned by the state budget this year outstrips the growth rate of total government debt. The latter will increase by 12.4%, while the domestic debt – by 21%. The government planned to borrow 45,771.2 million lei on the primary market. It also planned to borrow 600 million lei through direct placement among individuals.
The net domestic financing will amount to 8,130.0 million lei, taking into account that the difference in the sources of financing is used to repay the debt during the year. At the same time, the average rate will amount to 5.5% per annum, with a repayment structure of about 90% for short-term SS and 10% for long-term ones. Government bonds with fixed interest rate depending on demand and market fluctuations will be considered acceptable.i:
