On the other hand, if the government has problems negotiating such an accord, Moody’s would be far more concerned and could decide to downgrade Romania’s rating. At present, Moody’s is the only agency that has not downgraded Romania to the class of high-risk states for investment, unlike Standard&Poor’s and Fitch. As such, Moody’s is also the only agency to continue rating Romania as “investment grade”, after the two agencies above downgraded the country to “junk” last year.
However, Moody’s analyst added that Romania’s perspectives remain stable and reiterated estimates concerning Romania’s economy going into recession this year. Recently, Orchard declared for Business Standard that Moody’s intends to revise downwards prognoses regarding the evolution of the Romanian economy in 2009. He believes that things have worsened lately in Romania and that this is why the agency will modify downwards the estimate for gross domestic product (GDP) to some -0.5 or even higher, from its current 0.3 percent. Orchard added that the new government has adopted good measures, but stressed that outside help might be necessary to contribute to covering the budget deficit.
A financing agreement with an international institution is also expected by the Romanian banking sector. Claudiu Cercel, Deputy Director of Banca Romana de Dezvoltare-Societe Generale (BRD-SocGen) declared that Romania is expected to contract an agreement with the European Union this year for a loan, but that it remains to be seen whether IMF will impose restrictions on such financing.
