EIU: Romania’s High Foreign Debt Ups Vulnerability To Changes In Investor Sentiment

"Romania is one of the countries in the region most vulnerable to financial market turmoil. It is on course to run double-digit current-account deficits throughout the forecast period, fuelled by above-trend growth in the economy and especially in domestic consumption,” the EIU said in a report.

The institution said that high external deficit would be harder to finance in the upcoming period, as the privatization process is nearly finished.

“Romania also has a large gross financing requirement equivalent to around 30% of GDP. Funding the requirement has been straightforward because of strong FDI inflows, but it will become more difficult as privatization revenue tails off,” the EIU said.

In addition, the leu’s recent weakness against the euro, in which much of its foreign debt is denominated, is also a concern, the EIU said.