The ratings are supported by Romania’s moderate external and fiscal debt amid reasonably firm growth prospects.
S&P expects that the looser fiscal stance will drive fiscal and external deficits higher, but the base-case expectation is that these will prove manageable and not return to levels observed before 2008.
The agency notes that legislative instability could trigger downside risks to its forecasts, mentioning the proposed law on debt discharge which could worsen financing conditions for Romania’s private sector.
At the same time, S&P said it could raise the ratings if Romania’s budgetary consolidation resumes and net general government debt is firmly on a downward trajectory, and public enterprise restructuring is implemented successfully.