March 4 (SeeNews) - Standard & Poor's Global Ratings said it has accepted Romania's request for an appeal of its credit rating outlook, while affirming its rating at BBB-/A-3.
"S&P Global Ratings determined that the conditions for making such an appeal had been met in accordance with its policies and procedures," S&P Global said on Friday night in a press release.
"As a consequence, we will deviate from our calendar of 2019 EMEA sovereign, regional, and local government rating publication dates to resolve the appeal. We plan to resolve it within two weeks."
On Saturday morning, the prime minister's economic counselor, Darius Valcov, told local TV station Antena 3 that together with the finance minister they had sent a letter to S&P asking it not to change Romania's outlook to negative yet, as the country needs some more time to approve the 2019 budget and assess the effects of a planned tax reform.
Earlier this month, president Klaus Iohannis refused to sign the 2019 budget bill into law, referring it to the constitutional court. In his optinion the proposed budget is unrealistic, overvalued and some of its clauses run against the Constitution.
A controversial government decree issued in late December obliges domestic natural gas producers to sell their output mainly to suppliers at regulated prices, enforces new taxes for banks, energy companies and establishes new rules for the operation of private pension funds. The fiscal overhaul was widely criticised by industries, European Central Bank, European Commission, opposition parties and by president Iohannis.
S&P also said in the statement:
"The ratings on Romania continue to be supported by its moderate external private and public debt levels, and still sound growth prospects. In our opinion, Romania's institutional effectiveness remains weak, however, which constrains the ratings.
While Romania continues to benefit from solid fiscal and external stock positions, we think that notably widening fiscal and external deficits could over time eat into these buffers and make the Romanian economy increasingly vulnerable to slowing growth momentum."
(1 euro=4.7433 euro)