Fitch Ratings has revised Romania’s outlook to negative from stable, while affirming its long-term foreign and local currency issuer default ratings (IDR) at ‘BBB’.
The trigger behind the revision is the substantial worsening in Romania’s public finances expected in the short-term as the outbreak and spread of the COVID-19 pandemic aggravates an already weak fiscal position, the ratings company said on April 17.
The combination of a sharp economic contraction and a rise in spending will cause a material widening of the public deficit and a sharp rise in debt in 2020.
Although Fitch says it expects the economy to recover in 2021, uncertainty regarding the scope and length of the pandemic, combined with poor fiscal management in recent years, creates significant challenges in consolidating public finances over the medium term.
Standard & Poor’s credit rating for Romania stands at "BBB-" with a negative outlook. Moody’s credit rating for Romania is at "Baa3" with a stable outlook.