Economy

S&P to downgrade Romania’s outlook to negative

3 months ago

Credit rating agency Standard & Poor’s is expected to cut the outlook of Romania’s BBB- sovereign rating from “stable” to “negative”. Cristian Socol, the ruling Social-Democratic Party’s (PSD) economic advisor announced on Friday.

He put the blame on the “lobbying power of the banking, energy and telecommunications sector” in Romania, adding that the S&P decision will “put the brakes” on the Romanian economy.

Economic analyst Bogdan Glavan told Romanian news site Ziare that the blame falls squarely on the PSD government and particularly its “greed tax” adopted last December, levying extra taxes on the sectors of the economy mentioned by Socol in order to fill the budget gap caused by wage increases.

“From this point of view, things are abundantly clear. This (greed tax) decree is of unmatched stupidity. It alone should have been enough for a rating downgrade” Glavan said

Ionel Danca, spokesman for the opposition National Liberal Party (PNL) said S&P warned the Romanian government that it will downgrade the country’s outlook unless they withdraw the decree but the government – initially asking for more time to work out how to withdraw the decree – eventually ignored the rating agency.