The dismissal of the Florin Citu government on Oct. 5, 2021, after a no-confidence vote has left Romania without a government in the midst of surging COVID-19 infection levels and much-needed fiscal consolidation. Although persistent political uncertainty could accentuate fiscal risks over the medium term, we expect adherence to the ongoing Excessive Deficit Procedure to enforce budgetary consolidation sufficient to stabilize net government debt below 50% of GDP by 2024. In our view, risks from Romania's still-elevated twin deficits are mitigated by the prospect of sizable EU funds deployment, a reform program that is anchored in the recently agreed Recovery and Resilience Facility plan, and strong economic growth prospects. We affirmed our 'BBB-/A-3' ratings on Romania with a stable outlook.
