The ratings on the Republic of Romania are constrained by its: Fragile and largely unreformed economy. Romania's per capita income is one of the lowest among the 12 EU-candidate countries. Loss-making public enterprises and a vulnerable, confidence-sensitive banking sector continue to pose a serious challenge to the government's efforts at stabilization and fiscal consolidation. Notwithstanding the ongoing export-led recovery, with growth of between 3%-4% in 2001, Romania's economy requires a marked acceleration of reforms to sustain more rapid growth and disinflation. Inflation so far has not been brought under control and the government's 2001 year-end target of 27% is ambitious. Weak public finances. The consolidated budget deficit is expected to reach 4% of GDP in 2001. High transfer payments and
