According to the agency, the fiscal package adopted this week will generate a consolidation of around 0.6% of GDP for 2025, with the most significant contribution coming from VAT rate increase starting August 1, 2025.
For 2026, Moody’s expects a budgetary consolidation of around 3% of GDP, under the overall effect of measures adopted in 2025 and those set to come into effect in 2026.
At the same time, the agency underscores that the complete and efficient implementation of the measures and maintaining fiscal discipline will be vital in bringing Romania back on the fiscal-budgetary track, given the scope of the planned consolidation.
As regards public debt, while it should continue to rise to 62.6% of GDP at end-2026 (from 54.8% in 2024), Moody’s expects it to stabilize at around 66.5% of GDP starting 2029. The projection is below the maximum level of almost 71% of GDP forecast in March, when Romania’s outlook was downgraded to negative.
The agency also welcomes the Government’s intention of passing a second package, by the end of July, which is likely to include new fiscal measures both for revenue generation and the reduction of investment expenses in 2025 and 2026. These, doubled by reforms to state-owned companies and regulatory agencies governance, will further contribute to deficit reduction, underlines the report.
At the same time, Moody’s analysis also makes reference to the March 14 decision to downgrade the rating, noting it could be reversed to Stable should the economic situation improve.
(English version by Catalina Apostoiu)