The CFA Macroeconomic Confidence Indicator calculated based on the organization members’ estimates, decreased in July by 2.7 points, to 48.2 points. The deterioration comes on the top of 0.6 point decline in June.

Compared to the same month of the previous year, the index increased by 3.1 points -- but this was an effect of higher expectations while the current conditions (although moderately robust in absolute terms) are weaker than last year.

While the overall CFA index dropped below the 50-point benchmark score (indicating balanced views), the sub-index of current conditions remains on the optimistic side: 56.4 points indeed as much as 4.1 points down from one month earlier and 3.4 points below the level seen one year earlier but still moderately robust.

Its decline indicates significant deterioration of the perceived economic conditions, though, compared to a couple of months earlier. The wide budget deficit announced by the Government and the inflation slightly surpassing expectations might have prompted this. The sub-index reflecting analysts’ expectations has deteriorated at a slower pace, by 1.9 points in June-July, but it resulted in a score significantly below the 50-point benchmark, namely it reached 44.1 points in July.

On the upside, compared to the same month of the previous year, it is 6.4 points better indicating more optimistic views. The political turmoil and the Government’s failure to address the fiscal slippage might however keep depressing both sub-indices of the CFA macroeconomic confidence indicator in the coming months.

(Photo: Pixabay)

editor@romania-insider.com