CFA analysts' sentiment deteriorates in August in anticipation of fiscal package

The Macroeconomic Confidence Indicator of the CFA Romania Association decreased significantly in August (by 7.5 points), dropping below the 50-point benchmark that, on a 0-100 scale, indicates a relative balance to the value of 47.9 points.

This situation was due to the decrease of both components of the indicator, but it is noted that the component of anticipations decreased by 8.8 points to the value of 38.3 points.

"In the context of the anticipated tax increases, the confidence indicator dropped strongly in August. Also, the anticipation of indirect tax increases had the effect of a slight increase in inflationary expectations. In the context of high uncertainty, expectations for 2023 have been substantially reduced [to 2.1%]."

The anticipated inflation rate for the 12-month horizon increased slightly compared to the previous exercise and stood at an average value of 7.58%.

CFA analysts, however, expect the Government to keep the budget deficit at 5.5% of GDP this year.

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