Ratings’ outlook remains ‘negative’, financial rating agency said. In October 2008, Standard&Poor’s downgraded Romania’s short and long-term credit rating in foreign currency from 'BBB-/A-3' to 'BB+/B', and long-term credit ratings in lei from 'BBB' to 'BBB-', thus removing Romania from investment grade status.

Moody’s is the only financial rating agency that decides to keep Romania’s status within the investment-grade parameters, after S&P and Fitch sent Romania to junk.

“In our view, Romania continues to face major financial threats due to sharp contraction of external demand and narrowed commercial lending channel, which left a deep imprint on internal demand”, said Marko Mrsnik analyst at Standard & Poor's.

Therefore, Romania has glided into a serious recession, and the current account deficit which is now accounting for 12.5% of gross domestic product, is currently adjusting and it could narrow to below 6% of GDP by year-end. This would eventually scale back wage increase drive and inflation, although it would largely depend on a further devaluation of the local currency.