The macroeconomic confidence index in Romania rose by 4.2 points to 37.9 points in December, driven by less pessimistic expectations (+5.6 points) and slightly better current conditions (+1.3%), according to the latest poll among its members published by CFA Society Romania.

In absolute terms, the current conditions are seen as marginally above the neutral benchmark (52.5 points), while the expectations are much bleaker: 30.6 points.

Illustrating the pessimistic expectations, the CFA Romania members expect an average 1.7% GDP growth this year, compared to the 2.8% official forecast of the Government. 

The poll also reveals expectations for the debt-to-GDP ratio at 53% within 12 months – which would be quite a dramatic deterioration from 48% at the end of October 2022. It wouldn’t be totally impossible, but it would take a real sharp rise in nominal public debt given the still high inflation eroding the debt-to-GDP figure. 

On the public deficit data, the poll indicates moderate optimism. The public deficit is expected to narrow slightly from 5.5% of GDP in 2022 (estimated value) to 5.1% of GDP this year (projection).

Romania’s Fiscal Council estimates that the budget for 2023 will result in a cash deficit of around 5.7% of GDP, compared to the 4.4% of GDP expected by the Government, according to its opinion published on December 8.

iulian@romania-insider.com

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