Moody's monitors closely Romania's fiscal policies for possible outlook upgrade
"We could bring Romania's rating outlook back to stable, if we come to the conclusion that the Executive has stopped and, in the medium term, will reverse the structural deterioration of public finances," according to Moody's annual credit…
iulian ernst · Journalist
· Updated · 1 min read
"We could bring Romania's rating outlook back to stable, if we come to the conclusion that the Executive has stopped and, in the medium term, will reverse the structural deterioration of public finances," according to Moody's annual credit analysis.
"However, downward pressure could emerge if fiscal stability continues to deteriorate structurally, while external imbalances remain high," according to the report authored by Moody's chief analyst Olivier Chemia.
According to Moody's, the main challenges to Romania's rating include rising macroeconomic imbalances, fiscal and current account deficits fueled by past pro-cyclical policies and the high share of rigid public spending.
Romania's economy could recover thanks to domestic demand and the successful implementation of funds from the European resilience plan.
Romania benefits from a favorable rating for investments from international financial evaluation agencies, but it is only one step above the "junk" rating (not recommended). However, the rating outlook is negative.
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