Romania’s CFA Society confidence index improves but outlook remains bleak
<p>The overall macroeconomic confidence index compiled by CFA Society Romania based on a survey among its members improved by 2.3 points month-on-month (m/m) to 40.4 points in January, lagging below the 50-point balance benchmark, as both components showed current situation evaluation and expectations improved.&nbsp;</p>

<p>However, the expectations component improved by only 1.7 points and remains at a very low level of 32.5 points deep in the negative outlook region – still the best reading since last summer. The current situation component improved faster, by 3.5 points to 56.2 points, and reveals a moderately well situation.</p>

<p>Overall, the index thus improved for the second consecutive month after the political turmoil at the end of November (and early December) pushed it down to the lowest level in a couple of years.&nbsp;</p>

<p>Further improvement greatly depends on the improvement in the political stability ahead of and particularly after the May presidential elections. A second fiscal consolidation package expected after the elections would support positive developments after the first package endorsed at the end of 2024 made a visible contribution.</p>

<p>Regarding key macroeconomic indicators, analysts’ median expectations for this year’s economic growth improved slightly to 1.5% from 1.3% in December. However, the government hopes for a 2.5% growth.&nbsp;</p>

<p>Analysts see this year’s public deficit narrowing to 7.3% of GDP from 8.7% in 2024, thus trusting the government will not miss by much the 7%-of-GDP target. Inflation is expected at 4.97% over the next 12 months (thus as of end-January 2026), well above the 3.8% y/y seen by the central bank for the end of 2025 and 3.1% y/y in March 2026.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: <a href="https://www.dreamstime.com" rel="noopener" target="_blank">Natanael Alfredo/Dreamstime.com</a>)</em></p>