Country Risk Service Romania Updater

  • ID: 2101378
  • Country Profile
  • Region: Romania
  • 22 Pages
  • The Economist Intelligence Unit
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In the July rating report The Economist Intelligence Unit maintained the BB rating for sovereign risk. The score improved by 1 point, to 39, partially owing to transitory factors. A pro-cyclical and highly accommodative fiscal stance, a constraining structure of public spending and a volatile political environment are the main reasons for our relatively weak rating. Strong economic growth momentum and low levels of public debt limit downside risks to the score.

We maintained the BBB rating. The currency risk score improved by 2 points, to 38. Our relatively favourable outlook for the rating rests on the fact that the deflationary environment of recent years has passed, allowing the National Bank of Romania (NBR, the central bank) to raise interest rates, supporting a stronger a currency. Domestic and international political and policy volatility, however, are headwinds.

The rating was unchanged at BB, and the score improved by 1 point, to 45. Banking sector resilience has improved in recent years owing to actions taken by financial institutions and an improving economic environment. Notably, the ratio of non-performing loans (NPLs) to total loans has fallen sharply, from more than 22% in early 2014 to 5.7% in June 2018 (latest available IMF data).
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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 2019-23: Political stability

Central scenario for 2019-23: Election watch

Central scenario for 2019-23: International relations

Central scenario for 2019-23: Policy trends

Central scenario for 2019-23: Fiscal policy

Central scenario for 2019-23: Monetary policy

Central scenario for 2019-23: Economic growth

Central scenario for 2019-23: Inflation

Central scenario for 2019-23: Exchange rates

Central scenario for 2019-23: 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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