Romanian finance minister confident ahead of S&P review, argues early elections could trigger downgrade

Speaking on public broadcaster TVR on Thursday evening, 24 hours before the expected S&P decision, Nazare said the budget deficit adjustment had reached 1.6 percentage points, while investment spending had also increased, Economedia.ro reported.

“The deficit reduction is significant, by 1.6 percentage points, a very large adjustment,” Nazare said, adding that the deficit was RON 27 billion lower than in 2025 while investments had increased by RON 25 billion to RON 97 billion by the end of August.

He said Romania had remained on track with its fiscal targets despite the political crisis that began in May. The government is targeting a cash deficit of 6.2% of GDP and an ESA deficit of 6% this year, targets that Nazare said had been considered achievable by the European Commission and rating agencies.

“In these months – May, June, July, August – despite the fact that we had an interim government, we did not have a fiscal slippage,” he said. “This sent a very good message, which allowed us to obtain an investment grade rating with the two agencies, Fitch and Moody’s.”

Nazare said he had “great confidence” in the S&P assessment after intensive discussions with the agency’s representatives, although he acknowledged that political uncertainty weighed heavily on the review.

“I trust that the report that will be published tomorrow will take into account all this progress. I trust that the projections that I have presented are credible and I hope that they will be reflected in the report,” he said.

Romania’s political crisis has nevertheless increased pressure on its sovereign rating, with prime minister-designate Siegfried Mureșan’s proposed cabinet rejected by Parliament on September 30. S&P currently rates Romania at the lowest investment-grade level, with a negative outlook.

Nazare warned that an extended political crisis and an early-election timetable could undermine the preparation and adoption of the 2027 budget, with potentially serious consequences for the rating.

“We are not in a comfortable situation. Romania really needs a government that is quickly invested, but I do not want to discuss such scenarios. We need a 2027 budget agreed by all parties and adopted by the end of the year, because investors are looking at these aspects,” he said.