Romania risks downgrade to "junk" status: what rating agencies say about the country's economy

Romania is going through a critical period from an economic standpoint, with a real risk that international rating agencies could downgrade the country to "junk" status (not recommended for investment). The economy has been showing signs of strain for some time, and the political crisis that erupted two months ago has made matters worse.

The Ministry of Finance has already begun talks with Fitch analysts, expected in July, and with those from Moody's, scheduled for early August. The key objective is to maintain the "investment grade" rating, the only one that guarantees the state can continue borrowing at manageable costs.

How much of this year's borrowing has the state already covered

The Finance Minister confirmed that discussions with rating agency experts have already begun, in a hybrid format, emphasising how important maintaining this rating is for financial markets. In the short term, the technical picture looks as follows:

• On the domestic market, the state has already covered 58% of its annual fundraising plan through monthly auctions.
• The external financing programme is 35% covered.
• In total, Romania has already secured around 49% of the borrowing it needs for this year.

Former minister Florin Cîțu: the state is rushing to borrow while it still can

Not everyone views this acceleration in borrowing favourably. Former Finance Minister Florin Cîțu interprets the official figures differently, drawing attention to the fact that the ministry raised the domestic market borrowing ceiling in July to 8,500,000,000 RON, nearly 1,000,000,000 RON more than in June.

In his view, this urgency suggests the state has received worrying signals from the rating agencies and is attempting to raise as much money as possible before a potential negative verdict drives up interest rates. Cîțu puts the risk of a downgrade at over 70%, a forecast that other market analysts consider overly pessimistic.

Erste analysts: the rating is safe at least until the 2027 budget

Analysts at Erste Group take a more balanced view. They believe the rating agencies will hold off and will not change Romania's rating in the immediate future — at least not before the publication of the budgetary strategy for 2027.

Their reasoning: the deficit figures for the first months of the year look encouraging, and the annual target of 6.2% of GDP is considered achievable, with conditions in place for an even better outcome. The real test of the country's economic and political maturity will be, in their view, the drafting of the 2027 budget, at which point the Government will need to demonstrate its ability to press ahead with reforms and fiscal consolidation.

How much does Romania need to borrow in 2026

The budget deficit remained at a manageable level of 1.75% of GDP in the first five months of the year, yet the country's total financing requirements remain very high. According to Erste estimates, Romania's gross financing requirement for this year amounts to approximately 279,000,000,000 RON.

To meet these needs, the state will need to issue net bonds of around 128,000,000,000 RON, in addition to Eurobonds estimated at 10,000,000,000 EUR. Romania has already sent positive signals to external markets, having successfully raised 3,000,000,000 EUR and 2,000,000,000 USD as early as February.

Despite domestic political tensions and a turbulent international backdrop, yields on 10-year government bonds have remained stable, hovering around 6.7%–6.8%. Any potential decline is not forecast until next year, in line with a possible easing of monetary policy by the BNR.