Erste expects fiscal consolidation and lower borrowing cost, but no rating improvement this year

Romania's budget deficit will decrease from an estimated 8% of GDP in 2025 (better than the government's latest target) to around 6.4% of GDP this year (in line with the initial consolidation goals agreed with the European Commission) and the EU loans will ease the pressure on public funding with the 10-year yields seen as marginally lower at 6.5% in Q4 this year, according to the Erste Research report on the region's fiscal perspectives.

However, Romania's rating status, including a negative outlook attached to the lowest investment-grade level, will not change until the new prime minister, expected to replace Ilie Bolojan in April 2027, confirms his adherence to the fiscal consolidation policies, according to the analysts of the Austrian financial group.