Romania, an investment-grade country
Fitch reconfirms Romania's sovereign rating at BBB-/F3 for long and short-term foreign currency debt, with a negative outlook
Ştefan Stoica, 18.08.2025, 14:00
Preceded by a first set of tough fiscal measures taken by the Romanian government and with a second one under way, the assessment by the Fitch international financial rating agency for the Romanian economy and public finances had been awaited with concern.
On Friday night, Fitch announced that it had reconfirmed Romania’s sovereign rating at BBB-/F3 for long- and short-term foreign currency debt, but kept the negative outlook in place.
The decision to reconfirm the sovereign rating is based on the country’s EU membership and capital inflows from the EU, which support real income convergence and external financing, as well as by the positive evolution of GDP per capita and governance indicators, which are higher than in countries in the same rating category.
The negative outlook reflects the significant deterioration of Romania’s public finances, translating in a deep fiscal deficit and a steep rise in public debt as a percentage of GDP.
“The strengths that enabled maintaining the rating and the outlook are balanced out by the large and persistent state budget and current account deficits, the steep rise in public debt, political polarisation and a rather high external debt position,” the finance ministry responded in a statement.
Fitch forecasts an estimated 0.7% economic growth in 2025 (similar to 2024) and an increase to 1.2% in the next 2 years, supported by EU funding and the recovery of the Euro zone economy.
At the same time, Eurostat says Romania saw the highest economic growth rate in the European Union in the second quarter of this year, 1.2% compared to the previous quarter. According to the National Statistics Institute, Romania’s GDP grew by 0.3% in the second quarter of 2025, compared to the same quarter of last year.
As for the public debt, Fitch expects it to exceed 63% of GDP in 2027. According to the international experts, the factors that could improve the rating or outlook are steady fiscal consolidation and a sustained reduction of the budget deficit, a decrease in public debt as a percentage of GDP, the improvement of the current account position by reducing foreign debt and the mitigation of external financing risks.
On the other hand, they say, the lack of adequate fiscal consolidation in the medium term, the significant increase in public debt relative to GDP and the impact of excessive deficits on the credibility of public policies, macroeconomic stability and external liquidity could lower Romania’s rating.
“Maintaining the investment grade rating is crucial for Romania, given the high fiscal and budgetary pressures. This rating directly impacts financing costs on domestic and international markets, as well as investors’ interest in purchasing Romanian government bonds,” the Romanian finance ministry emphasised. (AMP)
