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February 27, 2021

Romanian economy stronger

Romania is increasingly credible for international investors, prime minister’s counsellor Cristian Socol says in a release to Agerpres on Friday. He quoted the latest report of the Standard & Poors rating agency, ‘S&P Capital IQ Sovereign Debt Report Q2 2014.’
Socol mentioned that this document shows Romania, with a 9.3 percent risk of default, is currently more credible on the international markets than Greece (34.2 percent), Cyprus (29.6 percent), Croatia (16.4 percent), Portugal (13.8 percent), Hungary (11.2 percent) and Bulgaria (9.9 percent). Following a sustainable macroeconomic consolidation, Romania now has a country risk at one third of the 2011 level, and half the May 2012 figure. The country’s risk of default decreased from 11.6 percent in Q1 to 9.3 percent in Q2.
He pointed out that Romania is more self-sufficient and borrows less. An analysis published on Thursday by Erste Research indicates gross financing needs of 55 billion lei in 2014, down from 67 billion lei in 2012, to refinance the public debt and to cover the current budget deficit.
‘I remind you that we have borrowed 75 billion lei in 2011, and we are going to borrow 50 billion lei in 2015. Erste Research shows that Romania has the highest rating upgrade potential among eastern and central European countries.
Socol also mentioned that the average term of the public debt has increased from 3.6 years in 2001 to 4.4 years in 2013 and to 4.9 years in May 2014, which means lower pressure for short-term financing.
Romania’s Treasury now has a 6 billion euro buffer, covering more than five months of necessary financing, while foreign currency reserves are adequate, above the sustainability threshold. ‘All these mean the Romanian economy has a higher immunity to shocks,’ the counsellor concluded.

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