S&P Confirms Romania's 'BBB-' Rating, Negative Outlook

S&P Global===S&P Global Ratings confirmed Romania's long-term and short-term credit ratings at 'BBB-/A-3', maintaining a 'negative' outlook. The agency expects Romania's government to make progress in fiscal consolidation, aiming to reduce the budget deficit to 5.5% of GDP by 2027 from 9.4% in 2024. However, S&P anticipates near economic stagnation in 2026 due to fiscal measures, eroded real wages, and rising energy prices, with growth projected to rebound to 2.5% by 2027-2029. Risks include implementation challenges for fiscal reforms, potential legal hurdles for budget adoption, and vulnerability to external energy market shocks, particularly from the Middle East conflict. A downgrade is possible if fiscal consolidation deviates from expectations or external pressures intensify. Conversely, an upgrade to a 'stable' outlook could occur if external and fiscal deficits substantially reduce, supported by economic recovery. Minister of Finance Alexandru Nazare expressed confidence in the authorities' capacity to continue fiscal consolidation.