Consolidation in Romania looks strong enough to avoid a downgrade
In the latest CEE Bond Report More positive news on ratings we present regular update on public finance stance and 2025 financing needs in the region. Apart from that, a lot attention goes to Romania, where fiscal consolidation package was recently approved by the Romanian government. In our view it looks strong enough to avoid a loss of investment grade this fall. Most of the consolidation efforts this year come from increasing the VAT rate and optimizing/postponing investments. The estimated impact of Romanias fiscal package is 1.2pp of GDP in 2025 and 2.2pp in 2026. Fiscal consolidation path in Romania will also determine the interest outlook. We recently revised our forecast and expect no interest rate cuts this year. It is also likely that Romania will tap international bond market over the next couple of weeks.