International rating agency Moody’s on August 7 affirmed Romania’s fragile Baa3 sovereign rating, along with its negative outlook, linked to high implementation risks related to the country’s ambitious multi-year fiscal consolidation programme. Compared to a year ago, the fiscal deficit narrowed faster than expected, but there is less clarity on further steps towards a sustainable deficit, the rating agency concluded. Just like Fitch a week before, Moody’s signalled that the political consensus on fiscal consolidation beyond 2026 emerged as the key driver for further rating actions, despite the fiscal consolidation having outperformed expectations so far. The rating agency remarks that political fragmentation has delayed the formation of a new government, but expressed expectations that a new administration will take office after the summer break. Despite the slightly faster-than-expected deficit reduction, the rating agency expects Romania's interest burden will still increase in the coming years given high financing needs and the prevalence of market-based funding.