Political situation poses no immediate risk to country's credit rating ...

The Fitch Ratings agency informs that political instability in Romania does not represent an immediate risk for the country?s credit rating, however it could move to the forefront if it affects fiscal consolidation, delays structural reforms or becomes permanent. Fitch gives Romania a BBB- rating with a stable outlook. According to the agency, the main risks for Romania?s rating consist of structural deficiencies and exposure to the crisis in Greece and the Euro Area. The country?s financial situation benefits from fiscal consolidation and substantial buffer-reserves against external vulnerabilities.?Thus, the main reason of concern for Fitch would be a delay in structural reforms that are part of Romania?s agreement with the IMF and the European Commission, including the privatization of state-owned companies, a domain that already has problems following the failure to sell Cupru Min Abrud and Hidroelectrica?s move to file for insolvency. Thus, the main scenario the agency is staking on is that the general deficit will drop as a percentage of GDP in the following two years, however it will do so at a slower rhythm than the one officially forecast, against the backdrop of a rise in social expenditures.

Source: nine o?clock (read more)

Source: http://www.morningnewsbrief.ro/finance-the-economy/political-situation-poses-no-immediate-risk-to-country%E2%80%99s-credit-rating-fitch/

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