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Country Risk Service Romania Updater Product Image

Country Risk Service Romania Updater

  • ID: 2101378
  • October 2014
  • Region: Romania
  • 22 Pages
  • The Economist Intelligence Unit

The sovereign risk score improved by 2 points in July, but the rating remains unchanged, at the upper end of the BB band. Despite improving fundamentals, the possibly negative implications for the 2015 deficit target of recent election-related fiscal measures caution against an upgrade. Public debt has risen since the crisis, but remains low at 38.4% of GDP (ESA 95 definition) at end-2013, and we forecast that it will remain around 40% of GDP in 2015-16.

Improved economic fundamentals led to a more positive external assessment and increased capital inflows, resulting in leu appreciation in the first half of 2014. However, increased risk aversion related to the Ukraine-Russia crisis has reversed this trend since June. Pressure on the currency may arise from renewed euro zone turbulence, an escalation of the Ukraine-Russia crisis and political uncertainty before the presidential election in November. A lack of agreement with the IMF on key issues such as tax cuts may unsettle markets.

The ratio of non-performing loans (NPLs) will remain high in 2015. Deleveraging has intensified ahead of euro zone stress tests this year.

Country Risk Service Romania Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2015-19: Political stability

Central scenario for 2015-19: Election watch

Central scenario for 2015-19: International relations

Central scenario for 2015-19: Policy trends

Central scenario for 2015-19: Fiscal policy

Central scenario for 2015-19: Monetary policy

Central scenario for 2015-19: Economic growth

Central scenario for 2015-19: Inflation

Central scenario for 2015-19: Exchange rates

Central scenario for 2015-19: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service

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