On June 7, 2001, Standard&Poor's raised its sovereign credit ratings on the Republic of Romania. The upgrades and positive outlook reflect recent advancement and good prospects for extending reform during the next several years. The ratings remain constrained by: A vulnerable and still largely unreformed economy. Romania's economy requires a marked and lasting acceleration of reform to sustain rapid growth, disinflation, and modernization of its economy. Medium-term fiscal viability requires an overhaul of the Social Security system, a further strengthening of tax administration, expenditure control, and financial discipline in public enterprises. Continued weak public finances and a disappointing estimated 2001 fiscal deficit of about 4% of GDP reflects an expansionary fiscal policy, given the strong rebound in economic
