Macroeconomic Confidence Indicator decreases in January 2024

The Macroeconomic Confidence Indicator of the CFA Romania Association decreased in January 5.5 points to 52.1 points, mainly due to the decrease in the expectations component of the indicator.

"Looking at the risk survey over the next two years, geopolitical risk in Central and Eastern European countries is probably not correctly assessed by the markets, and corrections may happen depending on the evolution of the war in Ukraine. Also, in the case of Romania, the high fiscal uncertainty, as well as expectations of tax increases in the context of a high budget deficit, will have a negative impact on confidence in the economy in the next 12 months," said CFA Romania Vice-President Adrian Codirlasu.

According to a CFA Romania press release sent to AGERPRES on Tuesday, the anticipated inflation rate for the 12-month horizon (February 2025) decreased compared to the previous year and stood at an average value of 5.57%, the lowest value in the last 20 months. However, only 65% of participants anticipate a reduction in the inflation rate over the next 12 months.

As for the EUR/RON exchange rate, around 70% of participants expect the leu to depreciate in the next 12 months, while the rest expect it to stagnate. Thus the average value of expectations for the 6-month horizon is 5.0030 lei for one euro, while for the 12-month horizon, the average value of the anticipated exchange rate is 5.0416 lei for one euro.

"In the January exercise, questions were also introduced on the intensity of occurrence of several risks: economic, geopolitical, as well as climatic that may affect Romania. According to the participants' answers: the main risks anticipated for the next two years come from outside the economy, namely the risk of armed conflicts between states and the risk of disinformation. These are followed by the risk of cyber attacks. The second most important risks are economic risks, including the risk of economic decline, the risk of unsustainable public debt, followed by the risk of inflation. Climate risks rank last in terms of intensity. These include the risk of extreme weather and pollution," the release reads.

The survey has been conducted monthly by the CFA Romania Association for 12 years, and is an indicator through which the organisation wants to quantify the expectations of financial analysts regarding economic activity in Romania for a time horizon of one year. The survey is conducted in the last week of each month, and participants are members of the CFA Romania Association and candidates for levels II and III of the CFA (chartered financial analyst) exam.