Romania’s Treasury head assures sovereign downgrade unlikely if fiscal consolidation continues
The head of Romania’s Treasury, Stefan Nanu, ruled out the risk of a sovereign downgrade “if the measures of the last 10 months are maintained,” according to Economica.net.
"As long as we keep the course we have been on for the last 10 months, we have nothing to worry about. [...] The fiscal consolidation does not end this year at 6.2% of GDP (budget deficit target), it must continue in the coming years,” Nanu said.
About an outlook improvement from the negative one given by all three key rating agencies, Nanu said that this is possible only once there is more clarity about future developments beyond 2026.
As of now, the rating agencies are in a “waiting mode,” Treasury head Nanu said, adding that the situation is stable: 37% of the year’s financing needs were already accumulated while the Q1 budget deficit of 1% of GDP (below the 1.3% quarterly target) is aligned with the 6.2% of GDP target.
Interim minister Alexandru Nazare admitted that the rating agencies have expressed concerns about the political turmoil in Romania. He said he approached the markets proactively.
“Yesterday we had discussions with the Fitch agency and the Moody's agency precisely to transmit the latest data and to have the best possible pulse of the situation", the interim minister claimed.
Minister Nazare also admitted that political turmoil is putting pressure on the exchange rate, but expressed confidence that the National Bank of Romania is acting in the most appropriate way possible to keep things under control.
Regarding the risk of Romania's downgrade, Alexandru Nazare showed that there are concerns.
"Obviously, there are concerns. There are concerns, and there are anticipated concerns, because we talked about these things a long time ago. I have been sending messages for weeks, and I am not the only one who has sent these messages. The Prime Minister has also sent messages related to instability. Prime Minister Ilie Bolojan has sent this on several occasions and acted correctly, precisely because such messages were needed and, unfortunately, they materialised," he mentioned.
iulian@romania-insider.com
(Photo source: Antonyesse/Dreamstime.com)
