Moody's: increasing teachers' wages will not decrease Romania's country rating

The decision to increase the teachers’ salaries is not that dangerous to cause a cut in Romania’s country rating and the public debt of the country is low enough, and the finance cost can be covered, Eastern Europe Moody’s expert Kenneth Orchard declared for the Romanian news agency NewsIn.

He added that the decision does not have any direct consequences upon Romania’s rating. The fiscal policy of the country, on the other hand, is something to worry because it was very lax and contributed to an economic disequilibrium in the last years.

Orchard thus underlined that Romania’s rating will be stable for the time but politicians need to be aware that the fiscal policy of the country got worse before elections. Moody’s analyst said that 2009 will be a tough year to govern as budgetary revenues could diminish due to low economic growth levels expected.

He added that, hopefully, the new government will take tough decisions to maintain the budget’s deficit under control. Moody’s is the only financial evaluation agency to maintain a stable perspective for Romania. Fitch, on the other hand, announced that it has decreased Romania’s rating from stable to negative, a couple of days after Standard & Poor’s took a similar decision.