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Macroeconomic Confidence Indicator declines 4.1 points in November, to 44.3 points


CFA Romania Macroeconomic Confidence Indicator declined 4.1 points in November 2018 compared to the previous month, to 44.3 points, and, against November 2017, it increased by 0.2 points, according to a CFA Romania release . This development was due to both components of the Indicator.

Thus, the indicator of current conditions decreased 7 points to 55.6 points (compared to the same month of the previous year, the current conditions indicator dropped 4.1 points). The anticipation indicator dropped 2.6 points to 38.7 points (compared to the same month of the previous year, the anticipation indicator increased by 2.4 points).

With regard to the euro / leu exchange rate, over 83% of participants anticipate a depreciation of the leu over the next 12 months (compared to the current value). Thus, the average anticipation for the 6-month horizon is 4.6991, while for the 12-month horizon the average value of the expected rate is 4.7427.

The anticipated inflation rate for the 12-month horizon (December 2019 / December 2018) recorded an average of 4.23%.

It is worth mentioning the anticipations of interest rate hikes (against current values) for both short-term (3 months) and medium-term (5 years), over 61% and over 64 % of survey participants anticipating this trend. Thus, the average 3-month maturity ROBOR in the next 12 months is anticipated at 3.64%, while yield on sovereign bonds denominated in RON with a maturity of 5 years is 4.78%. Due to the anticipated inflation rate, short-term maturities are still anticipated to have real negative interest rates.

CFA Romania's Macroeconomic Confidence Indicator was launched by CFA Romania in May 2011 and is an indicator through which the association wishes to quantify the financial analysts' predictions about economic activity in Romania for a one-year horizon. Also, the survey on which the indicator is calculated also includes questions regarding the assessment of current macroeconomic conditions.

This survey includes both specific elements of a confidence indicator that show the perception of CFA Romania's group of analysts on the evolution of financial markets, the business environment, yields and risks, as well as a fundamental forecast indicator on exchange rate developments, interest rates and inflation.

The poll is conducted in the last week of each month, and the participants are members of CFA Romania and Candidates for Level II and III of the CFA Exam.

The Macroeconomic Confidence Indicator takes values between 0 (lack of confidence) and 100 (full confidence in the Romanian economy) and is calculated on the basis of 6 questions regarding the current conditions - regarding the business environment and the labor market and the expectations for a time horizon one year for the business environment, the labor market, the evolution of personal income at the economy level and the evolution of personal wealth at the economy level.

Besides the necessary questions for calculating the Macroeconomic Confidence Indicator, the survey also evaluates the anticipations, for a one-year horizon, for the inflation rate, interest rates, EUR / RON exchange rate, BET index, the global macroeconomic conditions and the oil price.

CFA Romania is the association of investment professionals in Romania, largely holding the title of Chartered Financial Analyst (CFA), a qualification administered by the CFA Institute (USA). CFA Romania is one of the over 152 member companies of the CFA Institute.