S&P did not change the country rating, Romania is still recommended to investors, but the rating agency gave us a clear signal by changing the outlook from stable to negative, that we need measures to reduce the budget deficit, a prudent budget and a more flexible state, said the Minister of Finance, Tanczos Barna.

“The change in outlook, from stable to negative, represents a clear signal sent by the S&P rating agency: we need measures to reduce the budget deficit, a prudent budget, a more flexible state, in order to restore the budget balance and strengthen the country’s fiscal credibility. With the assessment announced this evening, S&P is not changing the country rating. Romania is still recommended to investors, as safe. The decisions taken by the Government to reduce the budget deficit and consolidate economic growth must be implemented at an alert pace, in the form already agreed with our European partners,” the minister said, according to Agerpres.

He stressed that the budget for 2025, which will be presented to the Government and sent for approval to Parliament in the coming days, reinforces ‘this moderate vision’ of public money management.

At the same time, he added, the measures necessary to reduce the deficit must be understood and respected by the leaders of all public institutions, all state-owned companies and union leaders, by every mayor and president of the County Council, by every local and county councilor.

“Neither the measures to reduce spending, nor the reforms to eliminate structural deficiencies in the economy can be delayed, because every day we apply these measures brings us closer to the assumed deficit target. ANAF and the Romanian Customs Authority have embarked on the path of digitalization and increasing institutional capacity, so they have a duty to increase the level of tax and fee collection. As our partners in Brussels confirmed this week, we can count on a robust economy, a constant growth, which will be supported, in 2025, by massive public investments. Both rating agencies and investors who look carefully at these signals will find in the fiscal-budgetary trajectory and in our economic evolution the effects of the measures assumed at the government level. The country rating depends largely on our ability to respect our commitments,” the Minister of Finance pointed out.

The S&P rating agency confirmed Romania’s ratings at ‘BBB-/A-3’ on Friday, but revised the outlook from stable to negative, due to high fiscal and external risks, the financial rating agency said in a statement.

S&P notes that Romania’s fragmented and uncertain political environment is likely to delay the new government’s fiscal consolidation agenda, and that all the heavy spending before the elections has pushed the fiscal deficit close to 8.7% of GDP in 2024, well above the agency’s expectations, which also signals challenges in controlling costs in a slowing economy.

Looser fiscal policies will keep current account deficits high and increasingly financed by debt-generating flows, potentially exposing Romania to shocks to foreign investor confidence.

“We have therefore revised our outlook from stable to negative and affirmed our ‘BBB-/A-3’ sovereign credit ratings for Romania,” the statement said.