S&P gives Romania two weeks to appeal rating outlook as it introduces new moves
BUCHAREST: Standard & Poor’s Global Ratings has given Romania two weeks to appeal its credit rating outlook, time Bucharest said was needed to approve its budget and assess tax moves.
Romania’s Social Democrat government introduced a new banking tax alongside other levies on energy and telecom firms through an emergency decree in December.
Although S&P affirmed Romania’s ‘BBB-/A-3’ ratings on Friday,whichitsaidweresupported by “moderate” external private and public debt levels, and sound growth prospects, the ratings agency took the unusual decision to not publish an outlook.
Finance Minister Eugen Teodorovici said this week that the new banking tax could exempt several types of financial assets in an attempt to dispel investor uncertainty which caused asset prices to fall to multi-year lows.
“I think it was a good move, just to leave a two-week period, so let’s see if the budget is approved,” the prime minister’s economic adviser, former finance minister Darius Valcov, told private television station Antena 3.
“On the other hand (we need to) see what are the prospects of other tax measures,” Valcov added.
The 2019 budget bill approved by parliament last month was deemed “unrealistic, over-valued and delayed,” by Romania’s president Klaus Iohannis, who referred it to the constitutional court, and by some economic analysts.
“While Romania continues to benefit from solid fiscal and external stock positions, we think that notably widening fiscal and external deficits could over time eat into these buffers and make the Romanian economy increasingly vulnerable to slowing growth momentum,” S&P said in a statement on Friday.
The ratings agency said it will deviate from its calendar of 2019 EMEA sovereign, regional, and localgovernmentratingpublication dates to resolve Romania’s appeal, which it plans to wrap up within two weeks. — Reuters