S&P Global Ratings: The collapse of the coalition government could complicate discussions regarding the budget for 2027

S&P Global Ratings declared on Wednesday that the downgrade warnings for the credit ratings of Hungary and Romania reflect the fiscal risks faced by these emerging countries in Europe.

Karen Vartapetov, senior analyst for sovereign ratings in Central and Eastern Europe, emphasized that fiscal risks are major risk factors for sovereign credit ratings in the region. The stagflationary impact generated by rising energy prices, along with support measures, will put pressure on fiscal positions, already affected by high defense spending and social transfers.

Referring to Romania, Vartapetov mentioned that the recent collapse of the coalition government in Romania complicates discussions regarding the budget for 2027, which is crucial for commitments to reduce the fiscal deficit.