Romania’s CFA macroeconomic confidence index slips in June amid bleak expectations

The Macroeconomic Confidence Indicator compiled monthly by CFA Romania association edged down by 0.6 points to 50.9 points compared to the previous month, in a correction after the sharp improvement (+4.9%) in May.

The index was 7.2% higher compared to the same month of the previous year, but in absolute terms 50.9 points is close to expectations for economic standstill (50).

The slight decline in June compared to May was due to the indicator's anticipation component.

The sub-indicator of current conditions increased by 2.2 points month-on-month, up to 60.5 points (1.4 points up year-on-year). The expectations sub-index deteriorated by 2.0 points to 46.1 points (11.4 points up year-on-year), the CFA press release reads. The expectations sub-index thus remains volatile and weak: it had surged by 8.2 points in May to correct downward by 2.2 points one month later. At 46.1 points, it places in the pessimistic expectations area (under 50), although the current conditions are seen still as favourable: 14.4 points up, at 60.5 points.

“Romania's current situation is good from a macroeconomic point of view, but there are risks. The country posted 5% growth in the second quarter of the year, but much of this growth was on debt," CFA Society’s president Adrian Codirlasu explained.

“Based on how the trade deficit and retail growth have developed, I expect growth figures in Q2 to be still high, 4-5%,” he added.

CFA Society’s head believes that average economic growth will be 3.5-4% this year.

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