Ratings agency Standard&Poors has kept the BB+/B rating on Romanian sovereigns. S&P describes the Romanian Government's general debt as “moderate” but says the country has “relatively low prosperity, exposure to foreign parent bank financing risks, and high, if declining, external debt.”

The BB+/B has a stable outlook because it is believed Romania will continue to meet its economic targets and external imbalances will be more moderate than recently. The S&P report mentions Austrian and Greek ownership in the banking sector as a concern but sees Romania's economy basics as improving – fiscal deficit declining, current account deficit narrowed, and the economy starting to re-balance.

In the report, S&P predicts that growth will slow to 1.2 percent in 2012, below the 1.5 percent figure recently given by the IMF. In the medium term, EU funds and the recovery of Foreign Direct Investment are predicted to help growth, but S&P considers that in the short term, private consumption will remain constrained.

Liam Lever, liam@romania-insider.com