The CFA analysts have revised slightly downward the projection for this year’s GDP to 2.7% from 2.98% previously, under the May survey conducted by the CFA Society Romania. But the macroeconomic confidence index increased by 4 points to 59 points on a scale of 0 to 100. The evolution was due to the expectations component, which increased by 8 points to 56.7 points.

The expectations thus improved to the highest value since the end of 2021. The current conditions component deteriorated in May compared to April but remained robust above 60 points.

The analysts’ expectations for inflation and budget deficit are marginally higher than the values indicated by the National Bank of Romania (BNR) and the Government, respectively, but they are consistent with the high expectations readings. Thus, the CFA analyst expectations for inflation over the next 12 months eased to 7.73% – the lowest since March 2022.

BNR expects 5.9% y/y inflation as of March 2024, under the latest projection, currently seen as slightly too optimistic.

The CFA analysts particularly believe that the public budget deficit would be 4.8% of GDP this year, compared to the 4.4% of GDP target, which indicates particularly optimistic expectations as regards the government’s capacity to keep the public deficit under control.

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iulian@romania-insider.com