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Romania's CFA Macroeconomic Confidence Index rises in May
CFA Romania, an association of investment professionals, said on Monday that the state of the country's economy is expected to improve in the next 12 months, seenews.com informs.
The CFA Society Romania Macroeconomic Confidence Index for May increased by 5.8 points compared to the previous month, reaching 66.6 points, CFA said in a monthly survey.
The increase was mainly due to a strong positive perception of the current economic situation, an indicator which rose by 7.9 points to 83.8 points. The indicator that highlights expectations towards the economy in the following 12 months increased by 4.8 points to 57.9 points.
Romania's economy is expected to grow by 4.2% in 2017 before expansion slows to 3.4% in 2018, according to the IMF's latest economic forecast issued in April. Romania's 2017 budget bill is built on projections of 5.2% economic growth and sets deficit equivalent to 2.99% of GDP, a target that many find too ambitious.
In 2016, Romania's economy expanded by 4.8% year-on-year compared to a revised growth rate of 3.9% in 2015.
CFA analysts said they were expecting, on average, inflation of 2.00% in the period June 2017- June 2018, up 0.35 percentage points compared to the rate projected in April.
Romania's annual consumer price inflation remained at 0.6% in May, a 24-month high and the same rate as in April, data from the national statistical office, INS, showed.
In its latest inflation report issued in May, Romania's central bank, BNR, lowered its 2017 inflation forecast to 1.6% from previously projected 1.7%. BNR also lowered its end-2018 inflation forecast to 3.1% from a previous 3.4% projected in February.
The analysts expect an exchange rate of 4.5650 lei ($1.12/ 1.00 euro) per euro in the next six months, down 150 pips from the previous survey and 4.6 lei per euro in 2018, similar to the estimates made in April. Some 73% of the participants in the survey said they expect the leu to weaken during the next 12 months.
On June 15, Romanian leu weakened the most against the euro since August 2012, as political tensions heightened after the governing Social Democratic Party (PSD) withdrew support for his six-month old coalition cabinet led by Sorin Grindeanu, citing poor performance.
Some 72.7% of CFA analysts said they expect global economic conditions to be normal over the next 12 months, while only 4.6% expect an unfavourable situation and 22.7% are optimistic.
The CFA Society Romania Macroeconomic Confidence Index, first released by CFA Society Romania in May 2011, represents an indicator that aims at quantifying financial analysts' expectations about economic activity in Romania for a time horizon of one year.
The Index takes values between 0 (no confidence) and 100 (complete confidence in the Romanian economy) and is calculated based on six questions regarding current conditions of business and labor market; expectations about business, labour market, personal income and personal wealth.