Ratings: Foreign and Local Currency: BBB-/Stable/A-3 For further details see ratings list. Romania's procyclical budgetary stance is amplifying wage pressures in an already overheating economy. While wage convergence is desirable, pay increases that significantly outpace underlying productivity have historically led to boom-bust cycles. We expect that consumption-focused growth will generate wider fiscal and external deficits, increasing the Romanian economy's vulnerability to an abrupt downturn over the medium term, though public and external debt is modest and we acknowledge that economic growth could remain strong for a considerable period of time. We are therefore affirming our 'BBB-/A-3' ratings on Romania. The outlook is stable, reflecting our view that general government and external debt is likely to increase only gradually over the
