International rating agency S&P on March 1 affirmed its BBB- foreign currency sovereign credit ratings on Romania, adding that the outlook, previously stable, is under appeal.
Prime minister Viorica Dancila's advisor, Darius Valcov, confirmed that the Government asked for a two-week delay, to allow President Klaus Iohannis to promulgate 2019 budget and “better evaluate the impact of the [controversial] government ordinance (OUG) 114/2018," local News.ro reported. Reportedly, S&P was going to change the outlook to negative, in response to OUG 114.
"The ratings on Romania continue to be supported by its moderate external private and public debt levels, and still sound growth prospects. In our opinion, Romania's institutional effectiveness remains weak, however, which constrains the ratings," S&P said in a press release.
"While Romania continues to benefit from solid fiscal and external stock positions, we think that notably widening fiscal and external deficits could over time eat into these buffers and make the Romanian economy increasingly vulnerable to slowing growth momentum," according to the same document.
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Romania's draft budget for 2019 targets “a moderate fiscal tightening” to a 2.6%-of-GDP deficit, down from 3% in 2018...