Romania Rating Remains Stable

Standard & Poor’s maintained Romania’s rating at BBB-/A-3, with a stable outlook, and said that the country’s budget and trade deficits will widen due to the consumption-focused growth, SeeNews reported. “Romania’s procyclical budgetary stance is amplifying wage pressures in an already overheating economy. While wage convergence is desirable, pay increases that significantly outpace underlying productivity have historically led to boom-bust cycles,” S&P said. S&P also said it expects the consumption-focused growth to generate wider fiscal and external deficits, increasing the economy’s vulnerability to an abrupt downturn over the medium term, though public and external debt is modest.