Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly-rated peers; or through targeted reviews of an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for Romania (BBB-/Negative; S-2/Negative) on 11 February 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated ratings history can be found on www.scoperatings.com.

Key rating factors

Romania’s BBB- rating is underpinned by i) EU membership supporting continued relatively strong access to capital markets on favourable conditions and long-term investment funding, ii) robust growth potential and diversified industrial base; and iii) still moderate levels of public and private sector debt.

The Negative Outlook reflects i) the deterioration in public finances following multiple years of pro-cyclical fiscal policies and the significant negative impact of the global health and economic crisis, alongside the rigid budget structure, which limits the fiscal room to support the economic recovery; and ii) limited foreign currency reserves to cover outstanding foreign currency denominated debt in a more stressed environment, narrowing the scope of monetary policy action available to support the economy.

Scope expects an increased political stability following the recent parliamentary elections, which could support the implementation of fiscal adjustments.

For the updated scorecards accompanying this review, click here

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Levon Kameryan, Analyst.

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