The World Bank's (WB) Board of Executive Directors approved on Monday a Development Policy Loan (DPL) worth 650 million USD, designed to support Romanian Government's efforts to strengthen fiscal sustainability, boost the development of private sector and foster job creation, according to a release of the international financial institution.

According to the WB, the loan, equivalent to 544 million euro, will create new opportunities for citizens and companies, from more accessible finance for small businesses to cleaner, more competitive industries and energy efficiency.

The institution mentioned that this funding comes at a critical moment for Romania's economy.

'In 2024, fiscal and current account deficits as a share of GDP were the widest in the EU. The government has responded with a robust reform program to put its public finances on a sustainable footing while laying the groundwork for stronger, more inclusive growth through a sound fiscal consolidation program. This loan will support the continued implementation of the government's reform agenda,' according to the WB release.

The loan is organized around two pillars. The first focuses on restoring fiscal sustainability by addressing structural weaknesses in tax policy and public spending, with measures projected to support fiscal consolidation toward a deficit target of 3% of GDP by the end of 2030.

The second pillar focuses on boosting economic growth in private sector and promoting job creation by easing key constraints to investment and competitiveness, including access to finance, innovation and digitalization, and reliable and affordable energy.

'Romania has taken bold and necessary steps to get its public finances on track and is seeing results as deficits narrow and financing costs come down. We expect these ambitious reforms to restore fiscal health, catalyze private investment, and create jobs. This financing reflects our confidence in Romania's steadfast efforts and our long-standing partnership with the government,' Yasser El-Gammal, World Bank Country Manager for Romania and Hungary said, as quoted in the release.

The goal of the World Bank Group is to help countries develop economies that convert growth into local jobs - not by shifting work from developed countries, but by capitalizing on opportunity where people already live. In order to boost job creation at scale, the World Bank invests in the foundational physical and human infrastructure for jobs, support a business-friendly environment and mobilize private capital. The World Bank focuses on five sectors with the highest job creation potential: infrastructure and energy, agribusiness, basic healthcare services, tourism, and value-added manufacturing. AGERPRES (RO - writing by: Constantin Balaban; EN - writing by: Rodica State)