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S&P affirms Romania at BBB-/A-3 with stable outlook

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 Standard & Poor's maintained Romania's rating at BBB-/A-3, with a stable outlook, and said that the country's budget and trade deficits will widen due to the consumption-focused growth, seenews.com informs.

"Romania's procyclical budgetary stance is amplifying wage pressures in an already overheating economy. While wage convergence is desirable, pay increases that significantly outpace underlying productivity have historically led to boom-bust cycles," S&P said in a statement on Saturday.

S&P also said it expects the consumption-focused growth to generate wider fiscal and external deficits, increasing the economy's vulnerability to an abrupt downturn over the medium term, though public and external debt is modest.

The stable outlook reflects the analysts' view that general government and external debt is likely to increase only gradually over the coming two years, S&P added.

S&P last reviewed Romania's rating on April 7, 2016, when it affirmed it at BBB-, with a stable outlook and also warned on excessive fiscal loosening.

In July, Fitch Ratings affirmed Romania's long-term foreign and local currency issuer default ratings (IDR) at 'BBB-', with stable outlooks, but warned on a growing budget deficit and economy overheating.

In April, Moody's Investors Service has changed the outlook on Romania's Baa3 government bond rating to stable from positive due to deterioration in public finance and debt outlook for government of Romania.

In March, Japan Credit Rating Agency (JCRA) has affirmed the outlook on Romania's long-term government debt in foreign currency and local currency to BBB/BBB+ stable.

 

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