JCRA improves Romania’s rating outlook from stable to positive

The Japan Credit Rating Agency (JCRA) has announced the improvement of Romania’s long-term RON- and forex-denominated government debt rating outlook from stable to positive, BBB-/BBB, a Public Finance Ministry communiqué shows.

“The agency’s decision to improve the rating outlook from stable to positive reflects the government’s efforts on lowering the budget deficit and current account deficit, the low level of public debt and the efforts on enhancing the absorption of European funds and the level of foreign direct investment,” the communiqué reads.

The rating agency notes the efforts made on reimbursing the loans contracted from the IMF in 2009-2011, as well as the policy of maintaining the budget deficit at low levels.

“Despite recent fiscal relaxation measures that consist of lowering social insurance contributions, raising the minimum salary and cutting taxes, the agency estimates that their impact on the budget deficit will be limited, given an economic growth estimated at 3 per cent in 2015 and 2016, but also against the backdrop of progressive budget expenditure cuts implemented progressively since 2009,” the communiqué shows.

On April 14 the Standard&Poor’s (S&P) financial rating agency confirmed Romania’s ratings for long- and short-term forex- and RON-denominated debt at “BBB-/A-3,” an outlook considered stable.

BBB- is the first rating in the investment grade category. Romania also has a “Baa3” rating from Moody’s and a BBB- rating from Fitch.

 

 

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