The West does not see Romania favorably, from an investment perspective. What the experts say after the signal from the rating agency Fitch

The West does not see Romania favorably, from an investment perspective. What the experts say after the Fitch rating agency’s decision

The rating agency Fitch, an institution that assesses the states’ economies to show how attractive a country is for investment, revised Romania’s outlook, from “stable” to “negative” status. Fitch analysts say Romania has not taken advantage of years of growth to improve its economic indicators.

Melania Hăncilă, consultant and executive search expert: “Fitch is practically issuing a warning to Romania, which is in a vulnerable situation due to the accumulation of fiscal deficits in recent years and the need to increase public spending to mitigate effects of the pandemic. “

The rating agency changed its outlook, but not its country’s rating, which means that Romania remains a recommended investment destination.

Adi Codirlaşu, President of CFA Romania, the association of financial analysts: “Fitch is the second rating agency after Standard & Poor’s that reduces Romania’s rating outlook. As long as there is no downgrade, the effects on the economy don’t exist. “

The budget deficit is an indicator that weighs heavily on Fitch’s analysis.

Melania Hăncilă, consultant and executive search expert: “It should be noted that Fitch has more pessimistic macroeconomic forecasts compared to the scenario taken into account by the Government in the budget rectification. Fitch estimates a budget deficit of 8% of GDP this year, if pensions don’t increase in the fall, compared to a government-estimated 6.7% of GDP budget deficit. I also believe Fitch’s estimate of economic decline of 5.9% is more realistic than the government’s estimate of just 1.9%. “

If the new measures announced by the Government do not stabilize the economy, the risk is that the country’s rating will decrease. In this case, Romania could lose some new investments.

Photo source: Profimedia

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