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Priorities for a new beginning

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With the new parliamentary equation resulting from the latest general election, Romania is heading towards a new year full of uncertainty and challenges, still dominated by efforts to contain the spread of the coronavirus and restart the economy, in a delicate macroeconomic situation. In the midst of a new beginning, the local decision makers have been given food for thought, as the business community has laid out what it believes to be the main short-, medium- and long-term priorities for Romania.
The latest edition of the AmCham Priorities for Romania lists "maintaining the investment rating, finalizing public infrastructure projects in various stages of develop­ment, identifying a new model of convergence, public administration reform" as short-term economic policy priorities.
The AmCham paper also suggests that on medium term Romania "must capitalize on the opportunity to reposition itself by increasing the relevance of its economy in the region, at the European and global level." Moreover, in order to strengthen its long-term position, Romania should have a country project, defining its regional and international role beyond 2030. Such a project would allow Romania to "consolidate its long-term economic and geostrategic relevance," the AmCham paper notes.
Overall the document represents a call for the relevant authorities to address "without delay the systemic vulnerabilities that affect critical sectors in the economy as well as using the unique opportunities generated by the health and economic crisis." 
On a more immediate level, there is some good news as Standard & Poor's maintained Romania's rating at BBB-/A-3, with a negative outlook. The rating agency indicated that it could lower Romania's rating if fiscal and external imbalances remained high for longer than anticipated, "with the absence of fiscal consolidation resulting in higher public and external debt or a wider interest bill than we currently forecast." It also cited a lack of economic policy synchronization, increased exchange rate volatility, with potential negative repercussions on public- and private-sector balance sheets as triggers for a potential downgrading.
However, S&P also said it could revise the outlook to stable "if the government makes headway in anchoring fiscal consolidation, leading to a stabilization of Romania's public finances and external position."
Dominated by the health crisis, 2020 is soon coming to an end. Hoping for a return to normality in the new year, Business Arena will continue to keep an eye on all the issues affecting the business community. For now, we would like to thank our readers and business partners for their valuable support, and wish everyone a Happy Holiday season and a healthy and prosperous new year.

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