Fitch praises Romania’s performance, calls for government caution pre-election

Romania has performed well against an environment of broader sovereign downgrades, causing its risk rating to be lifted to investment grade last July by Fitch ratings agency, according to Richard Hunter, managing director for EMEA & Asia Pacific at Fitch.

Hunter will be guest speaker at the third Credit Risk Management Conference organized by ICAP and Cycle European, both members of ICAP Romania, the credit risk firm, on April 24.

Fitch upgraded Romania’s rating to a BBB- last July, pronouncing the country a favorable destination for investment.

“This is a critical threshold for many investors, and represents hard-won progress on the budget deficit and fiscal credibility, even as threats from inflation and the banking sector remain live,” said Hunter.

In Central and Eastern Europe, country ratings range from high – the Czech Republic has an A+ rating – to low – Serbia is ranked at BB-, according to the Fitch representative. Broadly, the Euro zone crisis has already driven the revision of France’s top notch AAA rating to negative, although Germany’s AAA rating remains solid under the current conditions.

Read more about

The Emerging Threat of AI-driven Browser Exploits

read more

The finance sector remains the most exposed field to risk in Romania, mainly due to an increase in bad loans.

“Finance is probably our biggest concern, given the track record of non-performing loan increases, and the general tension experienced by financial sectors emerging from the stresses of the conversion to a market economy,” said Hunter.

He added that the government’s approach to the November elections will be critical in protecting Romania from the economic turbulence that hit peripheral members of the Euro zone, such as Ireland, Portugal and Italy.

Ovidiu Posirca