“Protracted domestic political uncertainty could further weigh on the economy and undermine investor confidence, leading to a deterioration in financing conditions and greater pressure on the exchange rate. The continuing US-Iran war and associated energy price shock also presents additional macroeconomic and fiscal risks”, shows Fitch.
The collapse of Romania’s government, and a deteriorating macroeconomic backdrop, underscore significant risks to the country’s multi-year fiscal consolidation efforts, Fitch Ratings also says.
Political uncertainty could remain high in the near term. Fitch does not expect the crisis to lead to snap elections, and President Nicusor Dan has started formal consultations to form a new government.
Fitch expects the near-term impact of the political crisis on the public finances to be limited. The Bolojan administration implemented consolidation measures last year, including a VAT increase in August and a prolonged freeze on public salaries and pensions.
Fiscal performance has been strong this year, with a deficit of RON22 billion (1% of GDP) in 1Q26, about half the size of the deficits in 1Q25 and 1Q24.
In the absence of a new government, a caretaker administration could continue implementing the 2026 budget, which targets a 6.2%-of-GDP deficit, narrower than 7.7% in 2025.
But the political crisis has further reduced visibility on the fiscal strategy in 2027, when a PSD candidate had been expected to take over from Bolojan, and in 2028, the next election year.
Delays in meeting reform milestones could jeopardise EU disbursements under the Recovery and Resilience Facility. These funds – amounting to 1.8% of GDP, comprising EUR4.6 billion in grants and EUR2.7 billion in loans – are a crucial source of financing and stimulus through public investment this year given domestic economic weakness.
(English version by Catalina Apostoiu)