S&P negatively assesses Romania’s rating prospect

Standard & Poor’s downgraded Romania’s rating prospects from ‘stable’ to ‘negative’ because of the deepening foreign trade imbalance, Romanian news agency NewsIn reports.

The revision of the rating perspective reflects the difficulties faced by governmental policies to answer foreign trade imbalances linked to difficult conditions at international level.

Both the fiscal and revenue policies initiated by the current Liberal government are considered by S&P experts as being expansionist and the upcoming elections can stimulate current spending even more. Thus, the experts estimate that the quality of government activity will drop and could intensify inflationary pressure.

However, S&P also outlines the positive aspects of Romania’s economic system: a low, below-the-average public debt.

The country’s rating could be downgraded over next 18 to 24 months if the imbalances continue to deepen.