On May 15, 2026, S&P Global Ratings affirmed its BBB- sovereign credit ratings on Romania, as well as the negative outlook, citing expectations for quick political normalisation, full absorption of EU funds (3.5% of GDP), and the drafting of a 2027 budget plan in line with the fiscal consolidation trajectory agreed with the European Commission. 

In its ad-hoc update report, S&P set quite high “baseline expectations” given the complicated political context in the country and the resistance posed by entrenched interests in mainstream ruling parties to genuine reforms. The baseline scenario came, however, with a consistent list of risks attached, including economic and political challenges that could undermine Romania's medium-term fiscal adjustment plan.

In support of its high expectations, S&P specifically pointed to the broad fiscal consensus across key parties to support further sizable consolidation measures this year and next, including the approval of a credible 2027 budget. The rating agency also assumed full absorption of EU funds, which would support Romania's” elevated external funding requirements.” 

Among the risks listed by S&P, there is economic stagnation partly triggered by the global energy price shock, deviation from ongoing fiscal consolidation amid political fragmentation, adverse shifts in nonresident investor sentiment (critical given Romania’s wide external financing needs of about 18% of GDP in 2026), and the high inflation preventing the central bank from pursuing a more stimulative monetary policy.

On the political front, S&P expects a new government to be formed in the next few weeks, either by the renewal of the past four-party coalition under a technocrat prime minister, or backed by a minority coalition with targeted support from non-coalition parties. The rating agency ruled out early elections, largely based on the constitutional architecture and president Nicusor Dan's rejection of such a scenario.

On the economic front, the rating agency expressed equally moderated optimism: the economic stagnation this year (analysts turned their projections towards the negative growth region) would be followed by robust 2.5% growth in 2027, combined with steady fiscal consolidation to a deficit of 5.5% of GDP. The fiscal trajectory envisaged by S&P is in line with the plan set by Romania under the Excessive Deficit Procedure (EDP), predicting 4.0% of GDP deficit in 2029.

iulian@romania-insider.com

(Photo source: Michael Vi/Dreamstime.com)