S & P has retained the government debt rating – macroeconomics

The rating agency Standard & Poor & # 39; s maintained the rating of the Romanian government debt at BBB- / A-3 for long-term and short-term debt in local currency and stable prospects. The reaffirmation of the Romania rating is supported by the moderate sovereign debt and external debt compared to most of the states in the European Union, the prospects for strong economic growth and the stability of the national currencies vis-à-vis the neighboring countries. The credit rating agency predicts real GDP growth of 4.3% this year, with moderate consumption and moderation in external demand, and an average growth of 3.5% over the next three years.
"I think it is a good thing that the second office reaffirms the credit rating and stable prospects of the Romanian economy, confirming that we are on the right track with the measures that the government and our attractive country have adopted for foreign investors," said Eugen Teodorovici, Minister of Public Finance.
S & P analysts point out: "So far, we believe that the current government's policy is predominantly short-term, with an emphasis on the available budget for raising wages and pensions in the public sector. " Initiatives for structural reform are at the expense of the outdated infrastructure network and the poorly performing education system In the medium term, the lack of progress in these areas could affect economic growth and discourage foreign investors. & # 39;
The Agency draws attention to the increasing risks to the institutional framework when the political efforts to disrupt the independence of the judiciary become more intense, which could undermine investor confidence. S & P also said: "In addition, we expect Romania's current and budget deficits to remain high as a result of the government's pro-cyclical fiscal policy, but we expect public debt and external debt to increase only gradually over the next two years, prevent a major downturn in the economy. "
S & P can review Romania's ratings as the institutional environment stabilizes and the government makes further progress in fiscal consolidation, firmly puts the net government debt on a downward trajectory and the governance framework, which will result in government penalties and stable and more predictable macroeconomic growth, I appreciate S & P.
Although the economy has boomed in 2017, and signs of excessive dependence are increasing, macroeconomic stabilization is left to monetary policy, while fiscal policy remains pro-cycled, according to Agerpres quoted by S & P.
For 2019, S & P estimates a deficit of 3.6% of GDP as a result of lower economic growth. The Agency considers that it is not sustainable to invest investment costs to manage the deficit, taking into account Romania's infrastructure needs. Recently, the rating agency of Moody & # 39; s announced that it has the BBB- / A-3 rating for the long-term and short-term government debt of Romania in the local currency, confirming the country's rating with stable prospects.
and the Fitch Financial Assessment Firm confirmed the long-term debt ratings of Romania in "BBB minus" at the beginning of July, the corresponding outlook for both ratings was stable but warned that the budget deficit could rise to 3.4% of GDP in 2018 and 3, 6% in 2019.

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