International rating agency Fitch has confirmed the BBB/stable rating for Romania’s long-term foreign currency debt. For the local currency debt, the rating was also affirmed at BBB/stable.
The country ceiling has been affirmed at BBB+ and the short-term foreign currency issuer default rating at F3.
Stronger than expected GDP growth and a steeper than expected drop in the country’s external debt could trigger an upgrade, the rating agency comments. On the opposite, fiscal slippage or slowing structural reforms as a result of political instability are seen as threats to the sovereign rating. External economic or political shocks that would erode the country’s buffers are also seen as putting its rating at risk.
Fitch assumes that the government will continue efforts towards attaining its medium-term objective of a structural budget deficit of 1% of GDP. Globally, the rating agency expects i. the unwinding of extraordinary global monetary stimulus to proceed in a broadly orderly fashion and ii. the key macroeconomic imbalances within the currency union to slowly unwound.
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