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 Republic of Romania's real economy faces mounting risks due to high and rising private sector leverage and the related dependency on an increasingly uncertain external financing channel. Standard&Poor's Ratings Services believes policy makers have not addressed these growing economic challenges, partly because the policy focus had shifted to the 2008 general election, which intensified the generally antagonistic and uncooperative political environment. In the absence of any significant counter-cyclical policy measures, Romania's economy has been overheating and overleveraging, a process
