Significant growth potential Low general government debt Lack of political commitment to address looming policy challenges Expansionary fiscal and income policies fueling domestic demand and contributing to inflationary pressures Large external imbalances and high dependence on debt financing The ratings on the Republic of Romania are supported by the sovereign's strong growth potential, low general government debt, and EU membership, which provides an anchor to economic policy. The ratings are constrained, however, by a political environment that hinders decisive policy responses in the event of economic challenges. This is a particular constraint given current signs of overheating and the increasingly difficult global credit conditions. Fiscal and incomes policies are expansionary, and the upcoming elections are likely to maintain pressure on
