CFA macroeconomic confidence index picks up in July but expectations remain gloomy

The Macroeconomic Confidence Indicator compiled by the CFA Romania Association based on a survey among its members increased to 37.5 points in July, from 36.5% in June.

This was mainly due to the increase, by 10.8 points, of the current conditions component to 56.2% (notably above the 50 points benchmark indicating balanced current conditions), while the expectations component, albeit slightly rising, remains very low (28.1 points).

The anticipated inflation rate for the 12-month horizon continued to increase, reaching an average value of 11.7%, which explains analysts' gloomy expectations.

"After eight consecutive months of decline, the confidence indicator recorded a correction. However, both the confidence indicator and its expectations component remain at low levels, which indicates expectations of a deceleration trend for the economy in the next 12 months. Inflationary expectations continued to rise, the participants estimating that inflation will remain in the in double digits area for at least 12 months", says Adrian Codirlaşu, vice-president of the CFA Romania Association, quoted by News.ro.

The survey also shows that the state budget deficit for 2022 has reached the average value of expectations of 7.1%, while the evolution in real terms of GDP in 2022 is estimated at 3.2%.

At the same time, the 3-month ROBOR index, used to calculate variable interest rates on loans in lei contracted before May 2019, is expected to reach 7.95% in the next 12 months - a marginal decrease from 8.05% at the moment the survey was carried out.

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