newsio aggregates and links to original sources. We do not own the original images or content. If you believe content infringes on intellectual property rights, contact us — it will be removed at first notice.
business/news//MarketScreener
S&P Global Ratings' downgrade warnings for the credit ratings of Hungary and Romania reflect the fiscal risk facing the two emerging European countries.
S&P Global Ratings issued downgrade warnings for Hungary and Romania due to increased fiscal risks.
KEY POINTS
Energy price shocks and related support measures are worsening already stretched fiscal positions in both countries.
Slovakia's recent credit rating downgrade is cited as evidence of regional fiscal vulnerabilities.
Romania's government collapse may hinder its ability to implement required fiscal deficit reductions.
LONDON, May 6 (Reuters) - S&P Global Ratings' downgrade warnings for the credit ratings of Hungary and Romania reflect the fiscal risk facing the two emerging European countries, the ratings agency told Reuters on Wednesday.
o Fiscal risks have been the key credit risks for CEE sovereigns for a few years, said Karen Vartapetov, Lead Analyst for CEE & CIS Sovereign Ratings at S&P Global Ratings.
o The stagflationary impact of the global energy price shock together with energy-related support measures will likely add pressure to fiscal positions, already stretched by high defence spending and generous social transfers, he added.
o "Our negative outlooks on Hungary and Romania and the recent downgrade of Slovakia's credit ratings clearly reflect these risks," Vartapetov said.
o Speaking about Romania, Vartapetov said the collapse of the coalition government could complicate budget discussions for 2027.
o "This is important as Romania's commitment to cut fiscal deficits implies additional consolidation measures in the coming years."
o Romanian lawmakers toppled Prime Minister Ilie Bolojan's pro-EU government in a no-confidence vote on Tuesday.
(Reporting by Libby George and Gergely Szakacs, editing by Karin Strohecker)
By Libby George and Gergely Szakacs