S&P Confirms Romania's Negative Outlook

S&P Global Ratings confirmed Romania's credit ratings at 'BBB minus/A-3' with a negative outlook, citing risks in fiscal consolidation and potential economic stagnation in 2026. The agency expects Romania's government to make progress in reducing the budget deficit to 5.5% of GDP by 2027 from 9.4% in 2024, despite disagreements within the governing coalition. Measures like VAT increases and public sector salary freezes are already in effect, but these contribute to pressure on private consumption. S&P Global Ratings warned of a potential downgrade if fiscal consolidation deviates or if external pressures, such as a prolonged energy market crisis due to the Middle East conflict, intensify. Conversely, an improvement to a 'stable' outlook could occur if external and fiscal deficits substantially reduce, supported by economic growth. Alexandru Nazare, Romania's Minister of Finance, expressed confidence in the authorities' ability to continue fiscal consolidation and maintain macroeconomic stability.