S&P Global Ratings has not changed the country's rating, as Romania is still recommended to investors, but it has given us a very clear signal by changing its outlook on Romania from stable to negative, that we need measures to narrow the national government deficit, a balanced budget and a leaner state, Finance Minister Tanczos Barna said on Friday.
"The change in outlook from stable to negative is a very clear signal sent by the S&P rating agency: we need measures to reduce the budget deficit, a balanced budget, a leaner state, to restore the budget balance and strengthen the country's fiscal credibility. With the rating announced tonight, S&P does not change the country's rating. Romania is still recommended to investors as safe. The decisions taken by the government to narrow its deficit and consolidate economic growth must be implemented at a fast pace, in the form already agreed with our European partners," the minister wrote on Friday evening in a social media post.
He added that the 2025 national budget, which will be presented to the government and sent for approval to Parliament in the coming days, reinforces "this sober vision" of public money management.
At the same time, he added, the measures necessary to narrow the deficit must be understood and respected by the heads of all public bodies, by all state-owned companies and trade union leaders, by each mayor and chair of the county council, by each local and county councillor.
"Neither the measures to reduce spending nor the reforms to eliminate the structural deficiencies in the economy can be delayed, because every day we apply these measures brings us closer to the deficit target. ANAF and the Romanian Customs Authority have embarked on the path of digital transformation and institutional capacity growth, so it is their duty to improve tax collection. As confirmed by our partners in Brussels this week, we can count on a robust economy, a steady growth, which in 2025 will be backed by massive public investment. Both the rating agencies and the investors who look carefully at these signals will find in the fiscal-budgetary trajectory and in our economic evolution the effects of the measures taken at government level. The country's rating depends to a large extent on our ability to meet our commitments."
S&P Global Ratings on Friday affirmed Romania "BBB-/A-3" ratings, but revised outlook to negative from stable on higher fiscal and external risks, according to a press statement released on Friday.
S&P Global says Romania's fragmented and uncertain political environment will likely delay the new government's fiscal consolidation agenda, and high pre-election spending pushed fiscal deficits to close to 8.7% of GDP in 2024, well above their expectations, which also signals challenges to cost containment amid a slowing economy.
Loose fiscal policies will keep the current account deficits (CADs) wide and increasingly financed by debt-creating flows, potentially exposing Romania to foreign investor confidence shocks.
"We therefore revised our outlook to negative from stable and affirmed our 'BBB-/A-3' sovereign credit ratings on Romania." AGERPRES
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