Erste: Romania Sovereign Rating May Be Raised In 2012

Erste said investors assess many Central and Eastern European countries as more attractive than some better rated states in the euro area, including Italy, Spain and Portugal.

"It took rather long for markets to realize that many CEE countries are in a much better shape than some euro area members (…). The next question is: how long will it take for rating agencies to align ratings to fundamentals?" Erste said.

The bank added that lower-rated countries, such as Croatia (BBB-), Hungary (BB-) or Romania (BB+), borrow more cheaply than Portugal, which is rated at BBB.

Additionally, current account deficits have shrunk considerably in Romania and Hungary, following internationally assisted fiscal and economic programs, Erste analysts noted.

"Both Hungary and Romania narrowed their current account deficits substantially and thus reduced their external financing needs to levels which can be smoothly financed on markets," said Juraj Kotian, Co-Head CEE Macro Research at Erste Group.

Erste is not the only major bank that depicted Romania in a positive light in the recent months. Both Italy's UniCredit and Dutch ING estimate the country's sovereign rating is likely to be upgraded in the following period, following fiscal and economic progress in 2010.

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