Romania’s CFA Society confidence index improves but outlook remains bleak

The overall macroeconomic confidence index compiled by CFA Society Romania based on a survey among its members improved by 2.3 points month-on-month (m/m) to 40.4 points in January, lagging below the 50-point balance benchmark, as both components showed current situation evaluation and expectations improved.

However, the expectations component improved by only 1.7 points and remains at a very low level of 32.5 points deep in the negative outlook region – still the best reading since last summer. The current situation component improved faster, by 3.5 points to 56.2 points, and reveals a moderately well situation.

Overall, the index thus improved for the second consecutive month after the political turmoil at the end of November (and early December) pushed it down to the lowest level in a couple of years.

Further improvement greatly depends on the improvement in the political stability ahead of and particularly after the May presidential elections. A second fiscal consolidation package expected after the elections would support positive developments after the first package endorsed at the end of 2024 made a visible contribution.

Regarding key macroeconomic indicators, analysts’ median expectations for this year’s economic growth improved slightly to 1.5% from 1.3% in December. However, the government hopes for a 2.5% growth.

Analysts see this year’s public deficit narrowing to 7.3% of GDP from 8.7% in 2024, thus trusting the government will not miss by much the 7%-of-GDP target. Inflation is expected at 4.97% over the next 12 months (thus as of end-January 2026), well above the 3.8% y/y seen by the central bank for the end of 2025 and 3.1% y/y in March 2026.

(Photo source: Natanael Alfredo/Dreamstime.com)