The Evolution of Public Debt of Romania in the Context of the Covid-19 Crisis

Abstract

Real GDP growth in 2020 could be negative, following the outbreak of COVID-19, and the adoption of economic measures by all European Union countries are key actions to mitigate these negative repercussions on the economy. In the exceptional circumstances created by the COVID-19 outbreak, companies of all types may face a severe lack of liquidity. Also, insolvent or less solvent companies may face a sudden lack or even unavailability of liquidity. This is especially true for SMEs, which in the short and medium term can seriously affect the economic situation of many healthy businesses and the situation of their employees, with possible consequences even in the long term, endangering their survival. External debt is a solution to supplement the resources to support the economy, even contributing to raising living standards. External loans can also be used to finance the balance of external payments, ensuring economic growth of the country under the conditions of their efficient use in parallel with an increase in exports. Inefficient use of external borrowing can lead to a restriction on access to external market financing.

Keywords

• covid 19
• public debt
• budget deficit
• economic growth
• external debt