Bulgaria still ahead of Romania

Romania will not see an improvement in its investment risk rating unless the macroeconomic stabilisation policies and structural reforms are conducted more rigorously, the analysts of American rating agency Moody’s say.
At the moment, Moody’s does not see any reasons as to why it should upgrade Romania’s country rating any time soon.
This means Romania will once more lag behind Bulgaria, which, in spite of the similar rating assigned by the US-based agency (B1), got a positive rating outlook that will soon place it among the group of countries with a better risk perception on the international markets.
Romania may have seen successive rating upgrades last year, yet it remains one of the lowest-grade countries of all the EU applicants in the opinion of the three major rating agencies, Moody’s, Standard&Poor’s and Fitch. Even though it is up for an improvement in the grade assigned by Standard&Poor’s, from BB- to BB next month, Romania will still not manage to catch up with Bulgaria, ranked two steps above it (BB plus) and with a positive rating outlook.
Fitch analysts do not feel Romania will catch up with Bulgaria any time soon, either. Even if the two are just one step away, the gap might widen, considering Bulgaria’s “positive” rating outlook and Romania’s mere “stable.” In other words, Bulgaria’s rating may be upgraded soon, while Romania does not deserve any more than it has already got, for the time being.
The state-run companies sector remains Romania’s biggest problem, as it still has not been restructured and is large enough to disturb the entire economy.
“The weak financial position of the large state-run companies has been constantly undermining Romania’s progress in terms of macroeconomic performance,” Moody’s says.
This means delaying the restructuring of this sector may come to threaten the fiscal consolidation and the sustainable economic growth.
Bulgaria has overcome most of these problems and has recently enacted a set of unprecedented measures for speeding up privatisation of the last large companies still controlled by the State.
The investors on the foreign capital markets tend to ignore the opinions of the rating agencies, as the Romanian eurobonds currently enjoy much better ratings than they would deserve if taking the risk ratings into account. This is also due to the low supply of such offers, though.