Romania

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Slower growth amid weakening external and internal demand. We expect gradual consolidation following several years of elevated fiscal deficits --The coalition government holds a narrow majority in a fragmented parliament. --Pre-election spending pushed the public deficit to almost 8.7% of GDP in 2024, and we expect it will narrow only slowly toward 6% of GDP by 2028. --The annulment of the first round of presidential elections in late 2024 has exacerbated a highly polarized political environment; new elections will take place in May 2025. --High government deficits will contribute to wide current account deficits, increasingly financed by debt-creating flows, potentially exposing Romania to

...S&P Global Ratings observes increased political fragmentation and polarization in Romania. This is demonstrated by the outcomes of last year's elections, which combined with slower economic growth prospects will further complicate the government's fiscal consolidation efforts over the next few years....

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