Romania Avoids Junk Status with Fitch Ratings' Warning Shot

Romania has narrowly avoided being downgraded to junk status by Fitch Ratings, maintaining its long-term issuer default rating at BBB- on July 31. The negative outlook means that a downgrade is more likely than an upgrade in the future.

The country's acting finance chief described the decision as 'a warning shot' rather than a victory, emphasizing the need for budget reforms and political stability to avoid a potential downgrade.

Romania's general government deficit is projected at 5.9% of GDP for 2026, down from 9.3% in 2024, while public debt relative to GDP is expected to climb to 64.5% by 2028.

The country's 'twin deficits' - a simultaneous budget and current account shortfall - remain a concern, as does the potential impact of political instability on budget reform efforts.