Romanian financial analysts don’t believe in quick economic recovery anymore

Financial analysts anticipate that the economic impact of the coronavirus pandemic will be felt strongly in Romania until the second quarter of 2021, according to a survey conducted by the CFA Romania Association in July 2020.

They anticipate a budget deficit of 8.3% of GDP for the current year, and a GDP decline of 4.4%.

When it comes to the economic recovery scenarios, the CFA Romania analysts don’t seem to share finance minister Florin Citu’s optimistic expectation for a V-shaped recovery. About a third (31%) of the surveyed analysts expect a W-shaped recovery, considering the return of the medical crisis, while a similar percentage of the analysts expect an evolution in the form of a “square root symbol," namely a quick partial recovery on the short term followed by stagnation or slow positive evolution, Agerpres reported.

The majority of respondents (59%) expect the changes in people’s behavior in terms of consumption or travel to be long-lasting (in order of years). At the same time, 44% of respondents believe that the impact on certain economic sectors will be long-term (years), and 33% believe that the impact on other sectors will be permanent.

The analysts’ solutions for getting out of this crisis include investments in infrastructure, education and health, investments in technology and digitalization, especially the digitization of public services, a better absorption of European funds and improving the efficiency of public-private partnerships.

CFA Romania’s Macroeconomic Confidence Indicator continued to drop in July, losing another 3.8 points compared to June, and reaching 30.3 points. Compared to the same month of the previous year, the indicator decreased by 17.9 points.

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