CFA Romania sees “good chances” for full-fledged economic recession this year

January retail sales readings (-9.1% y/y) sent an extremely negative message among analysts, some of whom consider the possibility of a negative economic growth rate for the entire year. The Middle East conflict had already depressed analysts’ expectations, reduced to 0.5% growth this year compared to the government’s 1.0% projection seen as generally realistic previously.

The Middle East conflict, bringing higher energy prices, also deferred analysts’ expectations for a first cut in the monetary policy rate, now seen as flat for the entire year.