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Standard & Poor's Ratings Services said it revised its outlook on the Republic of Romania to positive from stable, on the structural economic and institutional improvements driven by the framework of EU accession
S&P also affirmed the BBB- long-term and A-3 short-term foreign currency ratings, and the BBB long-term and A-3 short-term local currency sovereign credit ratings.
'EU entry, which is likely to occur on Jan 1, 2007, will support the ratings by locking in past reforms, and providing a framework for further growth- and investment-enhancing economic and institutional modernization,' said Standard & Poor's credit analyst Remy Salters.
EU membership is expected to cause spending pressures in Romania to mount from 2007, leading to a rise in general government deficits to 2-3 pct of GDP from 0.8 pct in 2005, and a 'moderate increase in the debt burden in the medium term', S&P said. 'Nevertheless, public sector debt was just 20 pct of GDP in 2005, compared with a BBB median of 45 pct, and the debt burden is not expected to exceed 25 pct of GDP in the current decade', S&P said.
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