A potential downgrade of Romania’s sovereign rating below the investment-grade category would significantly limit the investor base and could lead to higher financing costs—a critical concern given the state’s continued high borrowing requirements—stated Bogdan Zincă, a department head within the Ministry of Finance’s General Directorate for Public Debt and Treasury Cash Flow Management.
“For international investors—who still hold a substantial share, nearly 17%, of the securities issued on the domestic market—the investment options are vast. An investment fund based in America can easily invest in Romania, Poland, the Czech Republic, or anywhere else in the region; they conduct such analyses on an ongoing basis. What would a downgrade mean for Romania? First and foremost, it would severely restrict our investor base,” explained Zincă, as reported by Agerpres.
He pointed out that certain investment and pension funds are subject to restrictions that prevent them from purchasing securities rated below the investment-grade category. Consequently, a downgrade could trigger a sell-off of Romanian bonds and drive up the yields demanded by investors.
“Romania is an established issuer; we consistently issue debt on international markets. While our financing needs remain high, they are on a downward trend,” the Ministry of Finance representative affirmed. Zincă stated that the Ministry of Finance aims to reduce reliance on non-resident investors, given that the value of Eurobond issuances is projected to decline from approximately 15 billion euros last year to 10 billion euros this year, and to around six billion euros next year.
He emphasized that the sovereign rating influences not only the state’s financing costs but also the terms under which Romanian companies and local authorities can secure loans.
“It is very difficult for a company operating in Romania—or a municipality—to hold a rating higher than the country’s sovereign rating, regardless of how sound its financial situation may be,” Zincă explained.
Regarding the outlook for the sovereign rating, he noted that budget execution for 2026 and the development of a realistic budget for 2027 are crucial for maintaining the confidence of rating agencies.
Furthermore, Zincă pointed out that the fiscal consolidation process will need to continue into 2028. At the beginning of his remarks, he clarified that the views expressed are his own and do not represent the official position of the Ministry of Finance.
Meanwhile, Ruxandra Băndilă, Executive Director of the Foreign Investors Council (FIC), noted that several companies have postponed investment projects—despite having available liquidity—due to a loss of confidence and a lack of predictability. According to her, executives of multinational companies in Romania compete annually with their counterparts in other countries where their respective groups operate to secure the funding needed to develop production capacity. Investment decisions take into account macroeconomic outlooks and project profitability, as well as the time required for implementation.
Băndilă noted that 88% of the companies surveyed by the organization identify bureaucracy as one of their primary challenges, while predictability remains a key concern for investors.
The FIC representative stated that the postponement of investments affects several economic sectors, including trade and the pharmaceutical industry; she added that the resumption of projects to expand production capacity would signal a recovery in confidence in the Romanian economy.