LONDON, May 6 (Reuters) - S&P Global Ratings' downgrade warnings for the credit ratings of Hungary and Romania reflect the fiscal risk facing the two emerging European countries, the ratings agency told Reuters on Wednesday.
o Fiscal risks have been the key credit risks for CEE sovereigns for a few years, said Karen Vartapetov, Lead Analyst for CEE & CIS Sovereign Ratings at S&P Global Ratings.
o The stagflationary impact of the global energy price shock together with energy-related support measures will likely add pressure to fiscal positions, already stretched by high defence spending and generous social transfers, he added.
o "Our negative outlooks on Hungary and Romania and the recent downgrade of Slovakia's credit ratings clearly reflect these risks," Vartapetov said.
o Speaking about Romania, Vartapetov said the collapse of the coalition government could complicate budget discussions for 2027.
o "This is important as Romania's commitment to cut fiscal deficits implies additional consolidation measures in the coming years."
o Romanian lawmakers toppled Prime Minister Ilie Bolojan's pro-EU government in a no-confidence vote on Tuesday.
(Reporting by Libby George and Gergely Szakacs, editing by Karin Strohecker)
By Libby George and Gergely Szakacs
