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FinMin Bolos, about reconfirmation of ratingby Fitch: Strong signal that Romania is on the right track
Fitch's decision to reconfirm Romania's sovereign rating and maintain the stable outlook is a strong signal that the country is on the right track and that we are viewed with confidence by investors and international partners, the Minister of Finance, Marcel Bolos wrote on his Facebook account on Saturday.
"Excellent news from Fitch Ratings: They have reconfirmed our stable outlook and country rating. The announcement comes as a recognition of our continued efforts to control the budget deficit, support the business milieu and promote sustainable economic growth. A strong signal that Romania is on the right track, that we are viewed with confidence by investors and international partners", Bolos wrote.
According to him, the decision to reconfirm the sovereign rating and maintain the stable outlook is supported by the flows of European money that support the country's investments and macroeconomic stability, as well as by the positive evolution of GDP per capita and governance and human development indicators, which are at higher levels than the countries in the same rating group (BBB).
"However, the announcement should not be seen as an achievement in itself, but rather as a continued commitment to fiscal responsibility and efforts to ensure equitable and sustainable growth, to invest in education, health and infrastructure. We are determined to stay on track with reforms and continue to improve our rating and economic outlook going forward. And Fitch tells us as clearly as possible: One of the main factors that can lead to an improvement in the country's rating or outlook is continued deficit reduction budget, which would also support a firm decrease in the public debt expressed as a percentage of the gross domestic product in the medium term,'' he added.
The Fitch rating agency reconfirmed, on Friday, the rating related to Romania's government debt at BBB-/F3 for the long-term and short-term debt in foreign currency, as well as the stable outlook, the Ministry of Finance informs on Saturday.
The decision to reconfirm the sovereign rating and maintain the stable outlook is supported by the membership status of the European Union and the capital flows from the EU that support the country's investments and macroeconomic stability, as well as the positive evolution of the GDP per capita and governance and human development indicators, which are at higher levels than the countries in the same rating group (BBB), according to the agency's assessment.
According to a press release from the Ministry of Finance, sent on Saturday, in the evaluation carried out, Fitch mentions both the economic resilience that Romania has shown in the recent period (2022 and the first half of 2023), as well as the political stability that our country has enjoyed since the end of 2021. At the same time, the agency highlights Romania's stable public debt, as well as the downward trend of inflation in our country.
In the agency's opinion, Romania's economy will register a growth of 2.9% in 2023, respectively 3.2% in 2024, under the conditions in which our country will benefit from important European funds, both from the Multiannual Financial Framework 2021-2027 , as well as from the Recovery and Resilience Mechanism (PNRR).
The main factors that could lead individually or collectively to the improvement of the country's rating or the outlook are the continuation of the reduction of the budget deficit which would also support a firm decrease of the public debt expressed as a percentage of the gross domestic product in the medium term, as well as the structural improvement of the account position current by reducing external debt and external financing risks.
On the other hand, the persistence of large budget deficits that would lead to an upward trajectory of the share of public debt in GDP in the medium term, as well as the significant deterioration of external liquidity reserves, following the maintenance of large current account deficits and the reduction of income of foreign capital, are cited as factors that could lead to a worsening of the country's rating, states the Ministry of Finance.