Moody’s Investors Service expects Romania’s government deficit to reach 7.7% of GDP in 2020, while the level of debt as a percentage of GDP would rise to 43.7% by the end of the year, from 35.2 % in 2019, as a result of the deterioration of the fiscal balance and a decline of the economy of 5%, informs a release of the financial evaluation agency.

Moody’s also predicts that the deficit will gradually decline to 6.2% of GDP in 2021 and 4.4% of GDP in 2022. Under this scenario, the level of debt as a percentage of GDP would reach 46.8% in 2021, and 47.8% in 2022.

On Friday, Moody’s worsened Romania’s rating outlook from stable to negative, and reconfirmed “Baa3” ratings for long-term debt in local currency and currency.

The worsening of Romania’s rating outlook comes as a result of the structural deterioration of public finances, accentuated by the increase in long-term debt related to the 2019 pension reform, and the worsening of Romania’s external position, with an increase in short-term foreign currency debt that accentuates the country’s weakness in case of unforeseen events, is shown in the Moody’s release, according to Agerpres.