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Confidence in the Romanian economy declined in July for the second month in a row

Confidence in the Romanian economy declined in July for the second month in a row

CFA Romania’s Macroeconomic Confidence Index dropped by 0.3 points in July month-on-month, to 59.7 points, due to the worsened perception of the current economic situation, a press release informs. This comes after CFA Romania’s Macroeconomic Confidence Index declined sharply in June, by 6.6 points from the previous month, to 60 points.

CFA Romania’s Macroeconomic Confidence Index was launched in May 2011, quantifying financial analysts’ anticipations on the economic activity in Romania for a the next 12 months.

The current conditions index fell by 1.2 points, to 75 points, while the forecast index for the next year’s situation has slightly increased by 0.2 points, to 52 points.

The survey shows an increased worsening of expectations regarding business conditions in Romania, the index going down in July to -25 percent from -22 percent in June, but 52.3 percent of those surveyed expect the business conditions to remain the same in the next period

As regards EUR/RON exchange rate evolution, most of the analysts, 77.3 percent, expect a depreciation of the national currency in the next 12 months.

”As regards the EUR/RON exchange rate, the median values of anticipations for six months have indicated an anticipated exchange rate of 4.6000 (similar to the previous estimation). The anticipated inflation rate for 12 months (August 2017/August 2018) will register a median value of 2 percent (similar to the previous period),” the document reads.

Moreover, CFA analysts expect a slight worsening of the labor market over the next year with a -5 percent balance of responses (20.5 percent of respondents expect improvement), from -2 percent in June.

Not least, they forecast an increase in population revenue over the next year, but less pronounced than the previous month (+ 14 percent in July vs. + 29 percent in June).

About Anca Bernovici