The financial evaluation agency S&P Global Ratings has confirmed Romania's sovereign rating at «BBB-/A-3», maintaining the negative outlook, given the high risks related to fiscal consolidation and external economic developments. «The negative outlook reflects our opinion that, despite the efforts, the implementation risks related to the consolidation of Romania's public finances will remain high in the coming years,» the report states. The agency estimates that the budget deficit will continue to decrease gradually, to 6.5% of GDP in 2026 and 5.5% in 2027, from 7.7% in 2025. However, the fiscal adjustment is considered difficult, in the context of a weak economy and social pressures. Romania's economy is expected to stagnate almost completely this year. «We forecast that Romania's economy will grow by only 0.25% in 2026», states S&P, underlining the impact of fiscal consolidation, high inflation and the drop in real incomes on consumption. Inflation is estimated at 7.25% in 2026, above the previous forecast, against the backdrop of rising energy prices. In parallel, the current account deficit remains high, despite a stagnation of imports due to weak domestic demand. The report shows that the fiscal measures adopted – including the increase in VAT and the freezing of salaries and pensions – are already implemented, but they come with economic costs. «The economy will register a stagnation in 2026 against the background of fiscal consolidation, high inflation generated by energy and the decrease of real wages,» notes the agency. In the medium term, S&P estimates a moderate recovery of the economy, with an average growth of approximately 2.5% in the period 2027-2029, supported mainly by investments financed from European funds. «Investments financed from EU funds represent the only significant counterbalance» to the weakness of domestic demand, the report states. For 2026, these funds could reach around 3% of GDP. At the same time, the public debt is on an upward trajectory. S&P estimates that this will exceed 65% of GDP by the end of the decade, while interest costs will increase to 3.4% of GDP by 2028. The agency also draws attention to external risks, including those related to developments in the energy market. «Romania remains vulnerable to growing external risks on the global energy markets», under the conditions of a limited fiscal space. Another major risk is related to the implementation of reforms and political stability. «We expect the government to manage periods of tension, but we recognize risks regarding the implementation of fiscal measures and the reform agenda,» the report says. S&P warns that the rating could be downgraded in the next two years if the trajectory of fiscal consolidation deviates significantly or if economic growth remains weak. Also, delays in attracting European funds could increase the pressure on external finances. On the other hand, an improvement in the outlook could come from the significant reduction of deficits and the relaunch of economic growth. «We could revise the outlook to stable if the external and fiscal deficits were to be substantially reduced, supported by a return to economic growth,» the agency states.
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