BAKU, Azerbaijan, March 15. Moody’s has revised Romania’s credit outlook from stable to negative, citing concerns over the country’s fiscal strength and rising debt burden, Trend reports.
However, the agency reaffirmed Romania’s long-term issuer and senior unsecured ratings at Baa3.
The decision reflects the risk that, without further fiscal consolidation measures, Romania’s financial position will deteriorate significantly in the coming years. Moody’s projects the country’s fiscal deficit to remain high at 7.7% of GDP in 2025, with government debt expected to reach 68.5% of GDP by 2028. Rising borrowing needs and increasing interest costs could further weaken debt affordability.
Despite these concerns, Romania’s Baa3 rating remains supported by its moderate economic size, growth potential, and EU membership. However, the country’s proximity to the war in Ukraine increases its exposure to geopolitical risks.
To address fiscal challenges, the government has introduced measures such as freezing public sector wage and pension indexation. However, Moody’s warns that without additional reforms, the planned deficit reduction may proceed slower than expected. A major tax reform under Romania’s EU-funded National Recovery and Resilience Plan (NRRP) could help improve fiscal metrics, but its implementation has been delayed, with further details unlikely before the May 2025 presidential elections.
Romania’s long-term local and foreign currency ceilings remain unchanged at A2, reflecting moderate government influence in the economy and stable external trade and investment linkages.