Romania narrowly avoids junk rating on debt amid budget scrutiny

Romania is still investment-grade. Barely. Fitch Ratings confirmed the country’s long-term issuer default rating at BBB- on July 31, keeping it perched on the last rung of the investment-grade ladder. The negative outlook means the next move is more likely to be down than up. Romania’s acting finance chief described the decision not as a victory but as a warning shot: fix the political mess and get budget reforms moving, or the next review won’t be so forgiving. S&P Global Ratings reached a similar conclusion earlier in 2026, also affirming a BBB- rating under comparable fiscal and political pressures. The numbers behind the near-miss The general government deficit is projected at 5.9% of GDP for 2026, down from 9.3% in 2024. Public debt relative to GDP is expected to climb to 64.5% by 2028. The so-called “twin deficits,” referring to simultaneous budget and current account shortfalls, remain a structural concern. A BBB- rating with a negative outlook isn’t a pat on the back. It’s a probationary period. If Romania’s deficit doesn’t keep narrowing, or if political instability prevents the government from executing consolidation plans, a downgrade to junk would trigger forced sel...