S&P reconfirms Romania’s sovereign rating and stable outlook

The S&P rating agency reconfirmed the rating related to Romania’s government debt at BBB-/A3 for long-term and short-term foreign currency debt, as well as the stable outlook.

The decision to reconfirm the sovereign rating and maintain the stable outlook is supported, in the agency’s view, by the moderate stock of external and government debt and Romania’s solid growth prospects over the next two years. At the same time, S&P anticipates that Romania’s commitments within the European Union’s Recovery and Resilience Mechanism (MRR) will continue to anchor the political reforms of the Romanian authorities.

In the assessment carried out, S&P highlights both the resilience shown by the labour market in Romania, and the fact that unemployment remains close to the historical minimums recorded.

The main factors that could lead to the improvement of the country rating or the outlook are the substantial reduction of the fiscal deficit and the registration of a downward trend of public debt as a share of GDP. At the same time, the decrease in the costs of servicing the government’s public debt by improving the debt structure and the strong reduction in external deficits can represent other positive factors for Romania’s credit rating.

The main factors that could lead to a deterioration of the country rating or the outlook are: increases in government deficits and the level of public debt as a percentage of GDP above the agency’s current projections.