Romanian Ministry of Finance is preparing an online app for citizens abroad, who thus will be able to invest in government bonds.
Economists believe that the initiative has emerged as the budget deficit continues to grow. In just the first two months of 2024, the budget deficit rose to 1.67% of GDP, which is a third of the target for the entire year.
Romanian Ministry of Finance started selling government bonds to the public in 2018 through the Tezaur program. After two years, they also launched the Fidelis loan program.
The institution now aims to attract funds from millions of Romanians abroad, as reported by TVR Info.
"The way we currently sell government bonds does not provide comfort for the diaspora, as we do not yet have an online purchasing method. (...) We have a project. If you go to Dubai and want to buy from the beach, you will be able to buy from the beach. If you work in Italy, you can buy from Italy without coming home," said Ștefan Nanu, the General Director of the State Treasury.
The state is borrowing after the budget deficit in the first two months of 2024 rose to nearly 29 billion lei. Economists expect the budget deficit target for this year, set at 5%, to be exceeded.
Daniel Țecu, the President of the Federation of Romanians Everywhere "FADERE," believes that authorities should also consider the interest rates offered by other countries: "Romanians in the diaspora have more options than those in the home country. They are in a country that also issues such bonds. So there will always be a comparison in terms of interest rates."
The Finance Ministry in Bucharest has not specified whether government bonds for Romanians abroad will have the same interest rates as those in the home country.
The State offers an annual interest rate of 6% through the Fidelis program for government bonds in lei with a maturity of one year. Blood donors benefit from a higher annual interest rate of 7%. Government bonds in euros, with a maturity of one year, have an annual interest rate of 4%.
The Finance Ministry has borrowed nearly 40 billion lei from the population through the Tezaur program and over 15 billion lei through Fidelis.