May 5, 2020 / 10:10 AM / a month ago

Romanian FinMin says decision whether to hike pensions is political

BUCHAREST, May 5 (Reuters) - A decision whether to hike all state pensions in Romania by 40% from September which could trigger a rating downgrade and pressure financial assets is political and depends on the government, Finance Minister Florin Citu said on Tuesday.

All three major ratings agencies have Romania on their lowest investment grades, meaning any downgrade would push the country’s sovereign debt into so-called junk territory.

All three have revised the European Union state’s rating outlook to ‘Negative’ from ‘Stable’ citing deficit concerns, fuelled primarily by the pension hike approved by a previous cabinet. (Reporting by Luiza Ilie; Editing by Radu Marinas)

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