Romania's central bank (BNR) should cut the monetary policy rate on August 7  to follow the Fed and to address the recession concerns, vice-president of the CFA Romania Society Adrian Codirlasu argues. 

"The key interest rate is at 6.75%, and inflation at 5%. The gap is large, and it would be safe if the BNR operated a 25 basis point (bp) cut in the monetary policy interest rate," he argues, quoted by Ziarul Financiar.

As regards Romania's economic growth, he believes it accelerated to 2.0%-2.5% y/y in Q2 from 0.5% y/y in Q1 and will reach 2.5%-3% in full 2024. Consumption and construction are the main drivers.

Other local analysts are slightly less optimistic while still expecting Romania's economy to recover from the disappointing Q1.
"We expect a 1.7% y/y increase in Q2. Our industry is significantly affected by what is happening in the EU, but help can come from public investments in infrastructure, where there is money, a lot from the European Union," says Ionuţ Dumitru, chief economist of Raiffeisen Bank.

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iulian@romania-insider.com