The latest survey conducted by CFA Society among its members and published on November 26 reveals a cautious sentiment amid political turmoil but no imminent threats or changes in expectations.

The macroeconomic confidence index remained at the same level compared to the previous month, at 57.2 points (+25.1 points up YoY), and the forecast for the main economic indicators was rather on the optimistic side: 6.8%-of-GDP budget deficit (versus 7.13% official target!) this year, 51.3%-of-GDP public debt within 12 months (vs 49.7% at end-August), 6.9% GDP growth this year, a 5.4% headline inflation for the coming 12 months and moderate nominal exchange rate depreciation (from 4.95 to RON 5.03 to EUR within 12 months).

The survey is conducted "during the last week of each month," the press release reads, according to Agerpres. Still, it remains unclear whether this latest survey is based on data collected at the end of October (as suggested by the sole time specification, indirectly included in the release and assumed in this comment) or last week. It's not the sole ambiguity in the CFA Romania's release.

"This situation [of the macroeconomic indicator remaining flat mom at 57.1] was due to the diverging evolution of the two components of the indicator. The anticipated inflation rate for the 12-month horizon increased to an average value of 5.43%," the statement said - not specifying whether it is the current situation or the expectations component that improved.

Given the timing of the survey, an improvement in the current situation is unlikely - but will probably be reflected by the survey conducted at the end of November.

At the time when the poll was conducted (end-October, presumably), now prime minister Nicolae Ciuca was hopelessly seeking to form a minority cabinet (he abandoned his mission at that time to return a month later), and the political crisis was far from clarification.

On November 9, the national bank of Romania (BNR) hiked the refinancing rate by 25bp to 1.75%. CFA analysts expressed expectations for "at least a couple of rate hikes" over the 12 months.

Also, the statistics office INS revealed only on November 16 the flash Q3 GDP estimate that poured some cold water on 2021 growth projections. 

iulian@romania-insider.com

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