Fitch warns Romania that it risks being downgraded to “junk” status if it does not reduce the deficit and overcome the political crisis

Romania risks losing its investment-grade country status if it does not reduce the deficit and present a credible fiscal plan, Fitch Ratings warns. The agency will reassess the sovereign rating in January 2027, while the prolonged political crisis calls into question the authorities’ ability to adopt the necessary measures.

Fitch analyst Malgorzata Krzywicka told Bloomberg that Romania needs an additional deficit adjustment of approximately 1.5 percentage points of GDP to stabilize the growth of public debt. Drawing up the 2027 budget and presenting a credible path toward a deficit of 3% of GDP will be essential.

At the end of July, Fitch maintained Romania’s rating at BBB-, the lowest investment-grade level, with a negative outlook. The political crisis began after the government led by Ilie Bolojan fell in May, while attempts to form a stable majority failed.

President Nicușor Dan nominated Siegfried Mureșan for the position of prime minister. He has ten days to form the Government, but opposition from the PSD reduces the chances of securing a vote of confidence. Another failure could bring snap elections closer.

Fitch estimates the 2026 deficit at 5.9% of GDP, below the 6.5% target set by the Government, while the 2024 deficit was 9.3%. S&P Global and Moody’s have also flagged risks, and investors already treat Romania’s bonds as junk-rated.