It wasn’t much of a happy Christmas in Bucharest. On December 23, when most ratings analysts had left for the holidays, FitchIBCA downgraded Romania’s long-term foreign currency rating to B from BB minus. The agency noted the 5% fall in GDP in 1998, the current account deficit of 7% of GDP and the budget deficit (excluding privatization) at more than 5% of GDP. The report pulls no punches: “In the absence of both decisive action to tackle the twin fiscal and current account deficits and substantial financial assistance from the international community, Romania faces a serious currency and external financing crisis in 1999.
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