S&P: Romanian political problems will not affect country ratings and will not reverse reforms
ACTMedia - 10 Septembrie 2010
Political problems in Romania will not affect the country rating and will not reverse reforms made by the government as part of the accord signed with IMF, said the Standard& Poor's analyst Marko Mrsnik, in an interview granted to Bloomberg.
He said he did not expect political differences to prevent Romania from observing targets concerning the budget and structural reforms. The present perspective of the country rating is stable, which means that risks are adequate to the present rating, Mrsnik added.
Romania's BB+ rating, the highest in the junk category could be revised as growing if the government continues reforms and after the conclusion of the present accord with IMF, which expires in May 2011. Romania was evaluated by S&P with the same rating as Greece or Azerbaijan. In case Romania registers progress in the fiscal field, including the improvement of the fiscal frame and ensuring an orderly control on vulnerabilities in the financial sector, the rating might improve. Structural improvements in economy are essential for a positive revision, even more than the cyclic recovery of growth, the S&P analyst said.
Romania's economy has contracted by 7.1% last year and IMF anticipates a decline of 1.9% this year, before resuming growth next year with an advance of 2%. The growth will be gradual and more balanced than before the crisis, when it was backed especially by credits. Consequently, while Romania preserves its potential for high growths, we expect them to be inferior on a middle term compared to the period before crisis when they reached 7-8%, the analyst added.Romania has now a loan accord of 20 billion euro with IMF, EU, World Bank and the European Bank for Reconstruction and Development and the government has been harshly criticized by trade unions and the opposition upon the implementation of austerity measures as part of the accord.
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