Expectations of Romanian CFA analysts are gloomiest in two years

The macroeconomic situation is rather good, it has actually improved recently, but it is going to deteriorate sharply in the coming quarters, according to the outcome of the latest survey carried out at the end of August among the Romanian CFA analysts.

Thus, the indicator that reflects the current conditions improved by 4.9 points to 69.6% – well in the positive area of the 0-100 scale, where 50 points signify a balanced situation.

However, the indicator reflecting the expectations plunged by 10.2 points to 35.4 – the lowest reading since 2022.

The analysts cut their average expectations for the GDP growth this year to 2% from 2.5% in July in response to the flash estimate indicating disappointing economic growth in Q2. They also turned more pessimistic regarding the Government's ability to curb the fiscal slippage and expect 7.3% of GDP budget deficit this year (7.1% in July). Consequently, they expect the public debt-to-GDP ratio to reach 55 within 12 months.

Overall, the CFA macroeconomic expectations index dropped in the "negative" area at 46.8 points from 52 in July.

Regarding the monetary policy, the CFA analysts expect two more rate cuts by the end of the year (among subdued economic growth), with the yearend monetary policy at 6%. Another 4 rate cuts will bring the policy rate at 5% by the end of 2025, the analysts expect.

The consumer price inflation is seen at 4.95% within 12 months, which is still far from the 3.2% target set by the National Bank of Romania for September 2025.

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