Japanese JCRA rating agency has announced the improvement of Romania’s country rating from BBB-/BBB to BBB/BBB+ for long term debt in foreign currency and in local currency, with a stable outlook, the Ministry of Finance informed on Friday.
“The rating agency’s decision confirms the developments, the prospects of the Romanian economy and, importantly, that the deficit targets can be achieved in the context of the fiscal easing decisions, given the estimates of significant growth and revenue collection. In the context of assessments regarding financial stability the rating agency says it will monitor the progress of the law on debt discharge,” Finance Minister Anca Dragu (photo) said.
The release reads that the agency’s decision to improve the rating reflects the progress in the financial system, in particular by reducing the rate of bad loans in the banking system, the budget deficit in 2016 below 3% under fiscal easing measures, the strengthening of Romania’s external position, the prospects for sustainable economic growth and the low level of public debt.
JCRA considers that Romania’s economy will grow by about 4% in 2016 and in 2017, as the country is the third largest economy in Central and Eastern Europe, with a GDP of about EUR 160 billion in 2015. However, for the same year, it mentions the reduced level of the current account deficit of 1.1% of GDP, and the stable flows of foreign capital through foreign direct investments and EU funds.
In January, Fitch confirmed Romania’s rating for long-term government debt in foreign and local currency to BBB-/BBB, with stable outlook. Earlier, in December 2015, Moody’s agency upgraded the rating outlook from stable to positive and reaffirmed the sovereign rating to Baa3 (investment grade). Romania has a rating of ‘BBB minus’ from Standard & Poor’s.