Fitch Ratings has affirmed Romania’s long-term foreign-currency issuer default rating at ‘BBB-‘ while sustaining a negative outlook for the country. Romania is dealing with tremendous economic pressures at the moment. Notable among these are persistent fiscal and current account deficits, as well as increasing levels of public indebtedness. The affirmation of the ‘BBB-‘ rating reflects the positive aspects of Romania’s European Union membership, which supports the country’s income convergence and external finances.
Fitch’s rating explanation makes clear how important it is to Romania’s economic competitors that the country remain a member state of the EU. Beyond improving Romania’s future income potential, membership strengthens its external financial stability. Even with these advantages, the country is under intense fiscal constraints. These pressures may dampen its economic performance in the near term.
Economic Pressures
Romania is exposed to considerable risks to its fiscal sustainability stemming from wide and widening, though sticky, budget deficits. Contributing to the challenging environment, the current account deficit is striking as well. As a result, Romania’s public debt has been rising rapidly, raising concerns about the country’s long-term financial health. Fitch has confirmed Romania’s ‘BBB-‘ rating. This represents the country’s continued holding of its lowest investment-grade score—one notch above junk—through all three major agencies, but the country’s challenges remain enormous.
Fitch’s more negative rating has been brought on by increased political polarization in Romania. Ongoing rifts between parties and competing political factions are exacerbating the legislative backlash against enlightened governance. This discord makes it all the more difficult to address our nation’s pressing economic challenges. This volatility has the potential to shake investor confidence and in turn have a lasting impact on Romania’s growth path.
Future Outlook
Additionally, fiscal austerity measures will dramatically affect Romania’s economic performance at the end of 2025—Fitch warns. This was a major sticking point in 2026. Such austerity measures will inevitably further constrain public spending and investment. Consequently, they are likely to inhibit economic growth and aggravate existing fiscal pressures. The watch negative outlook reminds us that fiscal governance and political stability are key. If conditions worsen, Romania will face an immediate downgrade of its credit rating.
Despite these reservations, Romania’s membership in the EU is still widely seen as providing an important economic safety net. The Union’s support mechanisms and access to funding opportunities may help stabilize the country’s finances in challenging times. Moreover, compliance with EU fiscal rules might ensure the adoption of more sustainable economic policies in the future.