The interim Minister of Finance, Alexandru Nazare, announced that at the end of the week he had a “very good discussion” with the representatives of the S&P Global rating agency, in the context of the upcoming periodic evaluations for Romania by the major international rating agencies.
The official argues that, in the current economic and political context, it is essential that the authorities clearly convey the economic direction of the country and demonstrate continuity in fiscal reforms and policies.
“At the end of the week, I had a very good discussion with S&P, together with the team of the Ministry of Finance, which followed the dialogues of the last few days with the other rating agencies. In the current domestic and international context, it is essential to clearly communicate what we want to do as a country, beyond the political debates of this period“, Alexandru Nazare wrote on Facebook on Sunday.
The interim minister believes that one of Romania’s main problems in recent years has been the lack of consistency in economic policies.
“What we lacked in recent years was the consistency of coherent policies, capable of ensuring economic sustainability in the medium and long term”, Nazare stated.
He explained that the rating agencies are particularly looking at the authorities’ ability to continue the reforms and investments undertaken through the medium-term Fiscal Plan, the PNRR and the SAFE Program.
“This is exactly what the rating agencies are tracking today: the will and ability of the authorities to continue the reforms and investments undertaken through the medium-term Fiscal Plan, PNRR and the SAFE Program. Achieving these objectives means access to much cheaper financing — long-term grants and loans, at significantly lower costs than those in the financial markets — for the development of critical infrastructure, the increase of internal production capacities and the realization of the fiscal adjustment necessary to reduce the current account deficit”explained the minister.
Nazare stated that it is very important for the rating agencies to maintain the pace of fiscal adjustment and budgetary discipline.
“The results so far show that the current direction is correct, and they are due to the measures adopted and the fiscal discipline assumed by the Government led by Ilie Bolojan. The measures adopted last year, the fiscal discipline and the better collection of revenues, in a difficult macroeconomic context, contributed to a very good budget execution in the first quarter: a deficit of approximately 1% of GDP, less than half compared to the same period last year”the minister said.
According to him, in the second quarter a higher level of expenses is expected, including for investments and projects financed through the PNRR, which will be reflected in the level of the budget deficit.
“Nevertheless, the deficit remains within the parameters established up to this moment, and this matters a lot for financiers. However, we must not ignore the fact that Romania remains vulnerable due to the negative perspective associated with the investment grade”warned Alexandru Nazare.
The interim Minister of Finance reminded that Romania will have new evaluations from the main international rating agencies in the coming months.
“At the end of July, Romania will have the periodic evaluation of the Fitch agency, in August that of Moody’s, and in October that of S&P. In the conditions of a visible worsening of the situation, any of the agencies can convene ad hoc the rating committee, which could take a decision with extremely serious consequences for Romania”. said the minister.
Finally, Alexandru Nazare emphasized that the objective of the authorities is to return to a stable perspective and strengthen the confidence of investors and external partners.
“It is important to keep this direction and to continue the policies that have begun to restore the confidence of external partners and financial markets. Romania needs stability, consistency and credibility. These are the conditions to continue development and to protect the country’s financing costs in the years to come.” Nazare also transmitted.
