The major economic stake these days is avoiding a downgrade of the country's rating, Minister of Finance, Alexandru Nazare announced after, at the end of last week, the rating agency Moody's drew attention to the fact that the prolonged political uncertainty and the lack of a functional parliamentary majority may put pressure on the fiscal consolidation process and on the implementation of the reforms undertaken by Romania.

According to Moody's, a stable political framework and the institutional capacity to support the necessary measures are important for maintaining the fiscal trajectory assumed by Romania in the coming period, a release from the Ministry of Finance reads.

'The major economic stake these days is avoiding a downgrade of the country's rating. We have been at a vulnerable point before and we have managed, through difficult measures and a responsible fiscal direction, to avoid a very dangerous scenario for Romania. The line of responsibility must be maintained. Rating agencies do not only look at numbers. They also look at a country's capacity to respect its commitments, to reduce the deficit, to take the NRRP further and to remain predictable for investors and European partners', declared Alexandru Nazare, quoted in the press release.

Moody's notes that, so far, its expectations have been for the budget deficit to continue to decline, from 7.9% of GDP in 2025 to 6.5% in 2026 and 5.9% in 2027. However, the agency points out that this trajectory depends on Romania's ability to maintain fiscal consolidation and adopt the necessary measures after 2026, the Ministry of Finance says.

Moody's commentary also signals the pressure on financing costs. The agency estimates that interest payments could rise to 9.2% of budget revenues in 2026 and 9.6% in 2027, amid high yields and the increase in public debt in recent years. At the same time, Moody's notes Romania's vulnerability to exchange rate fluctuations, given that just over 50% of public debt is denominated in foreign currency, the Ministry of Finance states.

Another major challenge indicated by the agency is the implementation of the remaining reforms and investments from the Recovery and Resilience Mechanism, before the deadline of August 31, 2026.

Romania has a 'Baa3' rating from Moody's. All three major rating agencies (S&P Global Ratings, Moody's and Fitch) have a 'negative' outlook on Romania's sovereign rating, which places the country one step away from a 'junk' rating [not recommended for investment]. AGERPRES(RO - writing by: Andreea Marinescu; EN - writing by: Bogdan Gabaroi)

Display count: 197