{"id":4951,"date":"2025-05-12T07:02:10","date_gmt":"2025-05-12T07:02:10","guid":{"rendered":"https:\/\/ofero.news\/?p=4951"},"modified":"2025-05-12T07:02:10","modified_gmt":"2025-05-12T07:02:10","slug":"sp-warns-of-ineffective-policymaking-in-romania-regardless-of-presidential-election-outcome","status":"publish","type":"post","link":"https:\/\/ofero.news\/?p=4951","title":{"rendered":"S&P warns of ineffective policymaking in Romania regardless of presidential election outcome"},"content":{"rendered":"

Regardless of the outcome of the presidential elections in Romania, policymaking would become more fragmented, less stable, and less effective over the next few months, S&P Global told Reuters<\/a>.<\/p>\n

“(This) could lead to weaker growth, fiscal, and external outcomes than our already pessimistic assumptions,” the rating agency said.<\/p>\n

S&P Global said its post-election scenarios included an unstable minority government, which could attempt to advance with fiscal consolidation measures.<\/p>\n

A decision to call early parliamentary elections would further delay budget cuts and pressure refinancing efforts, while a third scenario saw the formation of a unity government with sufficient backing for fiscal stabilisation.<\/p>\n

Romania is on the edge of a downgrade to junk after years of wide public deficits.<\/strong><\/p>\n

S&P changed the outlook on Romania’s sovereign rating to negative in January and pushing the country’s debt out of the investment-grade category depends on a second fiscal corrective package that gained importance after the 2024 ESA public deficit was released by Eurostat at 9.3% of GDP \u2013 well above 8.6% calculated locally on cash base.<\/p>\n

The S&P rating agency warned in January that\u00a0it would lower Romania’s rating \u2013 putting it in the junk region \u2013 if the public finance metrics deteriorate at a faster pace, under the effect of either slower economic growth or government policies.\u00a0<\/p>\n

At that point, in January, S&P said that in the absence of further fiscal consolidation steps [on top of the end-December consolidation package], it expected a 7.5% public deficit in 2025 and slow fiscal consolidation to a 5.8%-of-GDP gap in 2028 with the debt-to-GDP ratio reaching 65.4% at the end of the four-year forecast period.<\/p>\n

The 2.3%-of-GDP public gap in Q1 pushed up consensus expectations to a full-year deficit of over 9%, increasing the importance of a second fiscal consolidation package.<\/p>\n

Separately, the European Commission expects a detailed budgetary plan for the seven-year fiscal consolidation under the Excessive Deficit Procedure. The outgoing cabinet has reportedly inked a plan that includes a 2pp VAT rate hike, higher dividend tax rate, and other elements of increased taxation.<\/p>\n

iulian@romania-insider.com<\/em><\/p>\n

(Photo source: Michael Vi\/Dreamstime.com<\/a>)<\/em><\/p>","protected":false},"excerpt":{"rendered":"

Regardless of the outcome of the presidential elections in Romania, policymaking would become more fragmented, less stable, and less effective over the next few months, S&P Global told Reuters. “(This) could lead to weaker growth, fiscal, and external outcomes than our already pessimistic assumptions,” the rating agency said. S&P Global said its post-election scenarios included […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4951","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/4951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4951"}],"version-history":[{"count":0,"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/4951\/revisions"}],"wp:attachment":[{"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}