“I think one of the goals we should have for this year is to avoid a downgrade of the sovereign rating to junk. The cost of money will increase, because the cost of Romania for the sovereign rating will increase, too. When you drop from investment grade to junk, the expected return will be higher, which induces a chain reaction,” Sergiu Manea told ZF in a special edition of the ZF Live show.
Romania can still borrow despite its high budget deficit by building a plan and being transparent in communicating it, he added.
Some economists said the budget deficit might be controlled by postponing the pension hikes.
The lending risk has increased in the entire world because the economy slowed down due to the COVID-19 pandemic, which can be felt in the borrowing costs, the BCR official said.
(English version by Loredana Fratila-Cristescu)