Moody's Maintains Romania Baa3 Rating With Negative Outlook

Moody's Ratings affirmed the sovereign rating of Romania at Baa3 on August 7, maintaining a negative outlook for the country. While the agency acknowledged that the fiscal deficit narrowed faster than expected, it highlighted significant risks regarding the implementation of Romania's multi-year fiscal consolidation programme.

The negative outlook is primarily driven by a volatile political climate following a May no-confidence vote against former Prime Minister Ilie Bolojan. This event led to political fragmentation that delayed the formation of a new government. Moody's stated that the outlook could return to stable if political consensus is reached to pass a deficit-reducing 2027 budget and an adequate public wage law by the end of 2026.

Other contributing risks include the ongoing war in Ukraine and a wide current account deficit. This decision follows a similar action by Fitch Ratings on July 31, which maintained a BBB-minus rating with a negative outlook. Both assessments leave Romania only one notch above non-investment-grade status.