Bucharest, October 12, 2024 – RBJ – Ministry of Finance – S&P agency reconfirms Romania’s sovereign rating and stable outlook
The S&P rating agency has reconfirmed Romania’s government debt rating and stable outlook at BBB-/A3 for long- and short-term foreign currency debt, the Ministry of Finance announces, stating that the decision is supported by the moderate stock of external and government debt and the prospects growth solids of our country, starting from the year 2025. “It is imperative to continue the reforms, to make public spending more efficient and to implement sustainable solutions to reduce the pressure on the budget”, says the Ministry of Finance from Bucharest.
On Friday, October 11, 2024, the S&P rating agency reconfirmed Romania’s government debt rating and stable outlook at BBB-/A3 for long-term and short-term foreign currency debt.
“In the agency’s opinion, the decision to reconfirm the sovereign rating and maintain the stable outlook is supported by the moderate stock of external and governmental debt and the solid growth prospects of our country, starting from 2025. At the same time, S&P anticipates that Romania’s commitments within the Recovery and Resilience (MRR) of the EU, as well as those within the Excessive Deficit Procedure (PDE) will continue to anchor the political reforms of the Romanian authorities”, states the Ministry of Finance in a statement sent on Saturday morning.
“It is a positive message for investors, being a new confirmation of the fact that we have taken the necessary and correct measures to combat the socio-economic effects of the recent crises and to ensure sustainable public finances. I emphasize, however, that we must remain tempered and focused on structural reforms, on the implementation of the commitments within the Recovery and Resilience Mechanism, but also on investments in infrastructure and digitalization, in order to ensure a sustainable economic growth of Romania in the medium term. It is imperative to continue the reforms, to make public spending more efficient and to implement sustainable solutions to reduce the pressure on the budget”, says the Romanian Minister of Finance, Marcel Boloş.
In the assessment carried out, S&P highlights both the resilience demonstrated by the labor market in our country, and the fact that unemployment remains close to the historical minimums recorded, states the Ministry of Finance.
The agency considers that Romania’s economy will register an increase of 1.6% in 2024, respectively slightly below 3% on average in the period 2025-2027, given that our country will benefit from important European funds both from the 2021 Multiannual Financial Framework -2027, as well as from the Recovery and Resilience Mechanism.
“The main factors that could lead to the improvement of the country’s rating or the outlook are the substantial reduction of the fiscal deficit and the registration of a downward trend of public debt as a share of GDP. At the same time, the decrease in the costs of servicing the government’s public debt by improving the debt structure and the strong reduction of external deficits can represent other positive factors for Romania’s credit rating. The main factor that could lead to a worsening of the country’s rating or outlook is represented by the increase in government deficits over the agency’s current medium-term projections, which would also lead to an increase in the level of public debt as a percentage of GDP. At the same time, S&P could downgrade Romania’s credit rating if other existing imbalances persisted, such as high inflation or substantial current account deficits, which could lead to a macroeconomic correction, respectively lower economic growth”, the Ministry of Finance emphasizes.
