S&P keeps Romania investment grade with negative outlook
The agency affirmed Romania at BBB-/A-3 but warned that prolonged political paralysis could obstruct fiscal consolidation in 2027 and 2028.
Balkan Spectator · Automated news desk Published Updated Event / data date: 2026-10-02
S&P Global Ratings affirmed Romania's long- and short-term sovereign ratings at BBB-/A-3 on 2 October, leaving the country at investment grade with a negative outlook. The agency said fiscal consolidation in 2026 remained on track despite the absence of an agreement to form a government. [3][4]
S&P said it could lower the ratings if prolonged government formation obstructs deficit reduction in 2027 and 2028. It could revise the outlook to stable if budget and external deficits fall under a credible medium-term policy plan. [3][4]
ContextThe decision follows parliament's 30 September rejection of Siegfried Mureșan's cabinet, the third failed nomination in recent months. The affirmation avoids an immediate downgrade but does not remove the fiscal and financing risks created by the political impasse. [1][2][3]
Replaced the pre-review rating risk with S&P's 2 October decision to affirm BBB-/A-3 and retained the agency's negative-outlook warning about political and fiscal execution risks.
Updated ·
Added the market and sovereign-rating consequences of the failed cabinet vote ahead of S&P's 2 October review, while avoiding any claim that a downgrade is certain.
The five-month political impasse is weighing on the leu and bonds before S&P reviews Romania's lowest-investment-grade rating.
Romania's failure to install Siegfried Mureșan's government has intensified pressure on the country's credit rating. Reuters reported that S&P was due to review Romania on 2 October at the lowest investment-grade level with a negative outlook.
The leu has fallen to record lows and local ten-year bond yields rose about 60 to 80 basis points to one-year highs over the previous two weeks. Romania's budget deficit improved to 2.89% of GDP through August from 4.51% a year earlier, but the full-year target remains 6.2%.
ContextMureșan's cabinet received 182 votes on 30 September, below the 233 required, making him the third nominee to fail in recent months. The financial pressure does not itself establish that a downgrade will occur; it raises the cost of further delay in forming a government and passing a deficit-cutting 2027 budget.
Updated after parliament rejected Mureșan's proposed cabinet by 182 votes to the 233 required, extending the political crisis.
Read this earlier version
Romanian parliament rejects Mureșan cabinet
The prime-minister-designate won 182 votes, short of the 233 required, extending Romania's political crisis after a third failed nomination.
Romanian lawmakers rejected prime-minister-designate Siegfried Mureșan's proposed centre-right cabinet on 30 September. The slate received 182 votes in favour and 15 against, leaving it short of the 233 votes needed for approval.
Mureșan had assembled support from the National Liberal Party, Save Romania Union and the ethnic Hungarian UDMR, but the Social Democrats and the nationalist AUR had said they would not support the cabinet. He was the third designated prime minister to fail in recent months.
ContextThe rejection prolongs a crisis that Reuters reported has weakened the leu and lifted Romanian borrowing costs. The president can dissolve parliament after the constitutional conditions for failed cabinet votes are met, but President Nicușor Dan has described an early election as a last option and further nominations are expected.
Mureșan seeks pro-European coalition to govern Romania
The prime-minister-designate is trying to assemble a cabinet without a clear parliamentary majority after two earlier nominees failed.
Romanian President Nicușor Dan nominated Liberal MEP Siegfried Mureșan as prime minister on 17 September. Mureșan has 10 days to propose a cabinet and programme to parliament, and remains prime-minister-designate rather than head of an approved government.
Mureșan said on 18 September that he would seek a pro-European coalition of the National Liberal Party, Save Romania Union and the ethnic Hungarian UDMR. AP reported that the three remain short of a majority and that Social Democratic leader Sorin Grindeanu opposed the plan.
ContextHe is the third nominee after Eugen Tomac withdrew and Adrian Veștea failed to win approval. Romania's constitution permits dissolution of parliament if it rejects two cabinet proposals within 60 days of the first rejection; dissolution is possible, not automatic.
Rețele Electrice România says the project raises installed capacity from 160 MVA to 200 MVA and completes the modernisation of its primary substations in the capital.
