Fitch Maintains Romania’s Investment-Grade Rating at BBB- with Negative Outlook

Fitch Ratings confirmed Romania’s sovereign credit rating at “BBB-” with a Negative Outlook on August 15, 2025. This means Romania remains just inside the investment-grade category, which is good news, but the negative outlook shows caution about the challenges ahead.

The rating benefits from Romania’s membership in the European Union and the capital inflows that come with it. Still, Fitch raised concerns about the country’s high budget deficit and increasing government debt. Economic growth is expected to be slow this year, with only a slight improvement in the next couple of years.

Romania’s Finance Minister welcomed the decision and said the government’s recent reforms, including tax hikes and spending cuts, played a key role in maintaining the rating. However, Fitch, along with other rating agencies, remains worried that these fiscal measures might slow economic growth or face political resistance.

The future of the rating depends on Romania’s ability to keep its budget under control and reduce debt. If the government stays on track with fiscal consolidation and improves the country’s external financial position, Romania’s credit profile could strengthen. But if it fails to deliver on its fiscal plans or political instability worsens, the risk of a downgrade grows.

Fiscal Consolidation: Romania has started fiscal consolidation, albeit from a very weak starting position in 2024, with the general government fiscal deficit at 9.3% of GDP. After measures implemented at end-2024 by the previous government, the budgetary impact of the July package is estimated by the government at around 1% of GDP this year with VAT increases (2pp of the standard rate, 2-6pp of the reduced rate) effective August 2025 as the main revenue side measure. Further tightening measures are scheduled for January 2026, including one more year of the nominal freeze of public sector wages and pensions.

Fitch Ratings on Romania, August 15, 2025

This rating decision, made official on August 15, 2025, is crucial for Romania because keeping an investment-grade rating helps the country borrow more cheaply and keeps foreign investors interested. Losing that status would increase borrowing costs and shake confidence in the economy. For now, Romania has a chance to prove it can manage its finances well, but the challenges ahead are significant.