Significant growth potential Low public debt and contingent liabilities Lack of political commitment to address the looming policy challenges Expansionary fiscal and income policies fueling domestic demand and contributing to inflationary pressures Further widening of large external imbalances and increasing dependence on debt financing The rating on the Republic of Romania is supported by the republic's potential for growth, low public debt, and low contingent liabilities. It is constrained by the government's limited policy response to Romania's rapidly growing external imbalances, against the background of increasingly difficult global credit conditions. Fiscal and incomes policies are expansionary, and the upcoming elections are likely to stimulate further increases in current expenditure, reduce the overall quality of governance, and intensify inflationary pressures. This
