CFA Society poll shows analysts' expectations down to levels seen during lockdown

The Macroeconomic Confidence Indicator calculated by the CFA Romania Association based on a poll among its members decreased to 36.5 points (on a 0-100 scale with 50 indicating balanced sentiment).

This deterioration was mainly driven by the decrease, by more than 10 points, of the current conditions component to 46 points. The expectations are even more pessimistic: 31.7 points.

The anticipated inflation rate for the 12-month horizon continued to rise, reaching an average value of 9.50%, given that the answers were given before the publication of the inflation rate for May.

"Amid the risk aversion triggered by Russia's invasion of Ukraine, as well as high inflation, the anticipation component of the CFA Romania Association's macroeconomic confidence indicator continued to decline. In May, inflation rates continued to rise, with anticipated inflation rates reaching a new all-time high in terms of interest rates, monetary policy by the National Bank to at least 6% in the next 12 months," according to CFA Association vice-president Adrian Codirlasu.

The poll, carried out at the end of May, indicates expectations for 2.9% GDP growth this year (Q1 GDP data released in June might have pushed up expectations), a 6.9%-of-GDP budget deficit (from 6.7% in 2021 and 5.8% target).

The local currency is seen as weakening to 5.11 RON to EUR in 12 months, while the prices are expected to rise by 9.5% over the coming 12 months (+14.5% over the previous 12 months).

(Photo: Oleg Kachura/ Dreamstime)