Romania's confidence indicator points to recessionary environment

The CFA Romania Macroeconomic Confidence Indicator rose by 7 points in June, reaching 37.5, but remains at levels consistent with a recessionary environment. As Adrian Codirlasu, president of the CFA Romania Association, noted, “The confidence indicator increased in June, driven by both domestic and external factors. Domestically, Romania achieved better‑than‑expected progress in reducing the budget deficit, while externally there was a period of relative calm in the conflict involving Iran.”

The survey projects economic growth of only 0.1% for the year and a budget deficit of 6.4% of GDP, with public debt expected to climb to 63% of GDP within 12 months. Inflation expectations for the next year rose slightly to 7.63%, with 65% of analysts expecting a decline and 25% foreseeing an increase. Eighty percent foresee the leu depreciating against the euro, with average forecasts of 5.3179 lei per euro in six months and 5.3737 in twelve months. Residential property prices are seen as overvalued by 75% of respondents, while the expected Brent crude price is $85 per barrel.