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Analysis: The global real economy is showing signs of weakness: Romania' s data show a slowdown
There are signs of weakness at the level of real economy worldwide while in Romania the data show a slowdown, previously strong segments such as IT and support services having a neutral or negative contribution to the GDP according to an analysis by Claudiu Cazacu, strategy consultant within XTB Romania, an investment company on international stock exchanges.
'The serious situation is taken into account at European level. Mario Draghi presented a report for a new economic strategy which would mean funds of 750 to 800 billion euro annually, meant to improve both competitiveness and security of the supply chains, the defence sector or social equity.Equally, such multi-annual projects take time, and the economic realities could become due shortly after the elections. Thus, naturally, investors are oriented towards places where decisions can come fast: central banks.Both in Europe and in the US reductions of the interest are expected. On Thursday, BCE could lower the reference by 0.25points. Next Wednesday, FED could decide, according to present expectations, a similar step' , he said.
According to him, a rather harsher measure is not impossible. The decision will depend on the data about inflation, the data on Wednesday as well as on the expectations of the sovereign debt markets. Now, some participants see the risk of dropping inflation under the target of 2% with an indicator of market expectations for inflation at the lowest level since 2021 to the present.
Although the measure of September is not settled yet, it is likely that until the end of the year the reference interest rate will drop from 5.25 - 5.5% to at most 4.25 - 4.5 % points out the representative of XTB Romania.
' Meanwile, in Romania the data show a slowdown in the real economy. And in addition to the advance of only 0.1% in the second quarter, the growth structure concerns in the medium term, previously strong segments such as IT and support services having a contribution neutral or negative to GDP' emphasizes Claudiu Cazacu.
In addition, the difficult moment of the European industry can also be seen in the local industry, especially in the automotive segment - all in a period with a deficit of over 4% in the first half of the year.
Central banks will take decisions adapted to the situation in Europe, the US and Romania, but, investors understand, in their turn, that they cannot offer, in the ace of a multitude of risks, an impenetrable shield, cocludes the specialist.
The XTB Group is an international provider of trading and investment products, services and technological solutions. XTB is a fintech company based on trust, technology and support. Since 2004, the XTB Group has expanded its activity, which now convers over 20 major markets in Europe, Latin America and Asia.