Fitch has also affirmed Romania’s short-term rating of ‘F3’ and country ceiling of ‘BBB+’, the rating agency said in a statement.
Fitch expects that Romania will meet its general government deficit target of 2.2% of GDP in 2014, and will continue to work towards attaining its medium-term objective of a structural budget deficit of 1% of GDP.
Although it revised down its forecast for 2014 GDP growth, following weak results in the first six months of the year, the agency projects an acceleration in GDP growth to an annual average of 3% in 2015-16, partly due to investment recovering.
According to Fitch, Romania is less affected by the sanctions against Russia than other east-central European countries, given weak trade ties and lower energy dependence on Russia.
Romania’s economy contracted for the second consecutive quarter in the April-June period, driven by poor performance in constructions, industry and an unexpected fall in retail trade, according to the data of statistics institute INS.
INS confirmed an earlier estimate showing a 1% decline in seasonally-adjusted gross domestic product in the second quarter, after a 0.2% contraction in the previous three months. This puts the economy in technical recession.
In May, Standard & Poor’s, the only rating agency which was still keeping Romania’s ratings in the “junk” category, upgraded the country’s rating to BBB-, with stable outlook, citing the fiscal consolidation and progress in reducing foreign debt.