Romania faces potential credit rating downgrade to junk status

Romania faces a potential sovereign credit rating downgrade to ‘junk’ status due to prolonged political instability and concerns over fiscal credibility. A Fitch Ratings analyst warned that the country is running out of time to avoid this downgrade, noting that the government's ability to reduce the budget deficit and present a credible budget is essential for its short-term creditworthiness.

President Nicușor Dan has urged for a balanced view of the country's situation, arguing that while challenges like corruption exist, Romania has achieved significant results through programs like the PNRR and SAFE. He emphasized that the country must maintain its investment-grade status and noted that the current macro-financial situation is better than in previous periods, though a budget rectification is necessary.

Political reactions have been sharp. PSD President Sorin Grindeanu announced plans to seek an official clarification from Fitch, suggesting that misinformation regarding the downgrade could lead to legal liabilities. Meanwhile, former President Traian Băsescu warned that a shift in political direction that loses the trust of Western creditors could lead the country toward bankruptcy.