In the aftermath of the first round of presidential elections in Romania, the national currency has crossed the significant threshold of 5 lei. This development follows the resignation of the government led by Social Democrat Marcel Ciolacu and has triggered significant economic reactions within the country.
In response to the depreciation of the currency, the National Bank of Romania has intervened in the financial market, which has resulted in a substantial increase in interest rates. The three-month ROBOR index has surged to 7.25%, marking the highest point since January 2023. To stabilize the currency, the central bank has reportedly expended at least 7 billion euros in recent days.
George Simion, a candidate from the far-right, has been working to soften his public image, aiming to be perceived as “Romania’s Meloni.” He has declared intentions to form a government in coalition with the far-right AUR and POT parties should he win the upcoming second round of presidential elections scheduled for May 18.
A recent poll conducted by the Verified Institute shows that Simion has garnered 38.9% support among respondents, while rival candidate Nicușor Dan stands at 31.3%. The poll also revealed that 14.7% of participants were undecided, and 8.9% chose not to respond. When excluding those who were undecided or did not answer, Simion could potentially secure 55.4% of the vote, in contrast to Dan's 44.6%.
The possibility of early elections has raised apprehensions within Romania's business community, as the electoral process could extend over several months, exacerbating political instability. Interim Minister for European Funds Marcel Boloș has indicated that there are currently no ongoing discussions regarding a potential agreement with the International Monetary Fund (IMF), noting that such involvement typically necessitates “harsher reforms” than those outlined in Romania’s National Recovery and Resilience Plan.
Additionally, Romania is facing a projected budget deficit of 8.65% of GDP for 2024, the highest in the European Union, which marks an increase from 5.61% in 2023. The burden of servicing state debt remains high, attributed to the country's low credit ratings from major rating agencies: Fitch at BBB-, S&P Global at BBB-, and Moody’s at Baa3.
