LONDON, Oct 15 (Reuters) - The collapse of Romania’s government is unlikely to cost the country its crucial BBB- credit rating, S&P Global said on Tuesday, as a probable delay to spending cuts is already factored in.
“Resulting political uncertainty in Romania will almost certainly delay fiscal consolidation measures until after the parliamentary elections in 2020, putting pressure on the country’s twin deficits,” S&P said.
“Nevertheless, our base-case macroeconomic scenario already captures these risks and we do not expect immediate effect on our long-term sovereign credit ratings on Romania,” which also currently has a ‘stable’ outlook.
BBB- is key rating level as it is the last rung on the ladder before ‘junk’, or non-investment grade territory, that risk-adverse heavyweight investors tend to shun.
Romanian Prime Minister Viorica Dancila’s centre-left government collapsed last week after losing a no-confidence vote in parliament, raising the prospect of prolonged political uncertainty due to a fragmented opposition. (Reporting by Marc Jones; Editing by Tom Arnold)