Fitch issues moderate note on Romania's fiscal package one month ahead of country update

Political risks have eased in Romania since the previous government introduced a consolidation package in late 2024 amid heightened tensions triggered by the annulment of November's presidential election and the coalition negotiations resulted in ambitious consolidation targets, but significant fiscal consolidation will weigh on economic growth, and implementation risks cannot be discounted, according to a balance evaluation of the first fiscal package issued by rating agency Fitch one month before the country review expected on August 15.

Fitch also notes the market's revived confidence seen in the successful FX bond issues after the launch of the fiscal package. Government bond yields had dropped from their recent highs in early May when nationalist George Simion won the first round of the presidential elections, the rating agency notes, stressing that the yields remain above the levels seen until mid-November 2024.