Both the current economic conditions and the expectations are in the “positive “ half of the chart again (over 50 on a 0 to 100 scale), and the overall Macroeconomic Confidence Index compiled by the CFA Society Romania was never higher since the war in Ukraine emerged last year.

The CFA index rose to 57.1 points in March, +4 points up from February, driven by the expectations shown at 53.6 points for the first time in the “positive” half of the chart in the past year after a 7-point leap that happened exactly one year after Russia invaded Ukraine.

The current conditions indeed deteriorated slightly from February but remain positive at 64.3 points.

“In the light of the positive news from the economy,” the analysts’ confidence kept rising in March in line with the anticipated economic growth, Society’s deputy-head Adrian Codirlasu announced.

The bullish sentiment among analysts may be the result of the warm winter that prevented extreme scenarios sketched last autumn or the record profits in the banking sector (the primary environment for most of the analysts polled) – but they run somehow against the news related to the public finance (an unexpected 1%-of-GDP supplementary deficit), the execution of the Resilience Facility reforms (blocked) and the imminent political meltdown ahead of the multiple elections in 2024.

Inter alia, CFA Society's deputy head recently said he expects the pension funds to keep losing contributors’ money (in real terms). But this doesn’t seem to conflict with the “good news coming from the economy”.

Romania’s inflation remains in the double-digit area, and CFA analysts’ projection for a 9% rise in prices over the next 12-month period implies that it will remain so by the end of the year.

The CFA analysts expect the government to perform relatively well and keep the budget deficit at 5.1% of GDP (4.4% of GDP being the official target) - compared to the 5.7% projection recently upheld by the Fiscal Council.

iulian@romania-insider.com

(Photo source: Jakkapant Turasen/Dreamstime.com)