Romania’s Macroeconomic Confidence Indicator compiled by the CFA Romania Association increased by 6.7 points to 44.2 in July, with confidence improving after rating agencies confirmed the country’s investment-grade status. Despite the stronger sentiment, CFA analysts expect the economy to stagnate in 2026, with the risk of recession remaining elevated.

The current conditions indicator rose by 8.1 points to 36.9, while the expectations indicator increased by 6.1 points to 47.9. The association said the improvement in confidence was accompanied by a significant decline in inflation expectations, as well as more favourable expectations for the exchange rate and interest rates.

The average inflation expectation for the next 12 months, to August 2027, fell to 6.32%. Some 90% of survey participants expect inflation to decline over the period compared with its current level.

Expectations for the Romanian leu remain negative. Some 84% of participants anticipate a depreciation against the euro over the next 12 months, while the remaining 16% expect the exchange rate to remain broadly unchanged. The average forecast is RON5.2901 per euro over six months and RON5.3445 over 12 months.

The survey pointed to continued pressure on public finances. But the average forecast for Romania’s 2026 budget deficit was reduced by 0.2 percentage points from the previous survey to 6.2% of GDP, while public debt is expected to reach 63% of GDP over the next 12 months.

Economic growth expectations for 2026 remained close to zero, indicating a high risk of recession despite the improvement in the confidence indicator.

The residential property market is also expected to remain weak. Some 69% of respondents forecast broadly unchanged prices in Romanian cities over the next 12 months, while 21% expect prices to decline. At the same time, 74% consider current residential property prices overvalued, and 11% consider them correctly valued.

The survey also included expectations for Brent crude following the war in Iran. Participants forecast an average price of USD 87 per barrel over the next 12 months, although the CFA Romania Association said uncertainty around the forecast remains extremely high.

iulian@romania-insider.com

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