Romanian consumption fell by nearly 5% for the tenth consecutive month. Risk of downgrade to junk

The National Institute of Statistics (INS) shows that, for the tenth consecutive month, Romanian consumer spending has fallen by nearly 5%. Analysts warn that the situation could worsen, and the trend is considered alarming as it coincides with a slowdown in the economy, falling state budget revenues, reduced investment, and the risk of mass redundancies.

At the same time, inflation in Romania is three times higher than the European Union average.

The verdict of the rating agencies

Romania is due to receive an important verdict from international credit rating agencies, which will determine whether the country will be downgraded to "junk" status (high investment risk). Such a downgrade would seriously damage the economy, and the bleakest scenario being discussed is one in which Romania would no longer be able to borrow on external markets, leaving it without the resources to pay pensions and salaries for several months.

In their assessments, the rating agencies are monitoring four key factors:

• political stability
• the budget deficit
• public debt
• the progress of reforms and the PNRR

People are already feeling the effects of this economic situation, against a backdrop of falling consumer spending and high inflation.