Both the expectations and the sentiment on the current conditions have deteriorated in September under the latest survey conducted among the members of the CFA Society Romania, with the overall index plunging to only 40.1 points – 6.7 points less compared to August and 10 points below the neutral 50-point benchmark.
The feeble economic growth achieved this year despite the strong fiscal stimulus was the main element behind the deterioration of analysts’ sentiment.
CFA Society deputy head Adrian Codirlasu pointed to rising concerns about an economic recession next year – although this is not the baseline scenario.
The current conditions remain, however, favorable (64.1 points) despite the 5.5-point deterioration compared to August. In contrast, the expectations are at least bleak: 28.1 points, 7.3 points less compared to August.
The analysts’ expectations for economic growth this year deteriorated from 2.0% in August to 1.7% in September, and there is room for further adjustments in the months to come. The budget deficit is seen now at 7.3% of GDP from 5.7% of GDP in August after the Government officially abandoned the 5%-of-GDP target and adopted the European Commission’s 6.9%-of-GDP projection.
The analysts’ projections for the country’s public indebtedness, 57% of GDP over a 12-month time horizon, point to the urgency of a fiscal consolidation strategy expected from the Government only after the general elections in December.
iulian@romania-insider.com
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