Macroeconomic Confidence Index continues to decline amid recession risk, uncertainty

 CFA Society Romania's Macroeconomic Confidence Index decreased in February by 3.8 points, to 36.6 points, and the inflation rate in the next 12 months is anticipated at 4.85%."Amid the risk of a recession, and the uncertainty in the economy, the confidence index, and especially the current conditions component, continued to decline. Consistent with this evolution are the reduction of economic growth expectations for the current year as well as an increase in expectations regarding the government deficit," said Adrian Codirlasu, chairman of the CFA Society Romania, in a press statement releasedon Tuesday.The current situation was mainly due to the sharp decrease in the current conditions component, which decreased by 10.4 points, to 45.9 points. At the same time, the expectations component remained relatively constant (-0.5 points).As for the EUR/RON exchange rate, over 94% of the participants anticipate a depreciation of the leu in the next 12 months, and the rest a stagnation of the exchange rate. Thus, the average value of the anticipations for the 6-month horizon is RON 5.0306 to the EUR, while for the 12-month horizon, the average value of the anticipated exchange rate is RON 5.1015 to the euro.Regarding the evolution of residential property prices in cities, 39% of participants anticipate a stagnation in the next 12 months, while 50% anticipate a decrease. Also, 72% of the participants consider that the current prices are overvalued, and 28% that they are correctly valued.The government deficit forecast for 2025 increased compared to the previous year to the average value of expectations of 7.4% of GDP. The economic growth expectations for 2025 are down from the previous year, at an average value of 1.1%.The public debt calculated as a percentage of GDP is expected to increase to 59% in the next 12 months.The survey has been conducted monthly by CFA Society Romania for over 13 years and it is an indicator designed to quantify the expectations of financial analysts regarding the economic activity in Romania for a time horizon of one year. The survey is conducted in the last week of each month, and the participants are members of the CFA Society Romania .The Macroeconomic Confidence Index ranges from 0 (lack of confidence) and 100 (full confidence in the Romanian economy) and is calculated based on six questions regarding: current conditions - related to the business environment and the labour market, as well as expectations for a one-year time horizon for: the business environment, the labour market, the evolution of personal income and the evolution of personal wealth at the level of the economy.In addition to the questions necessary for the calculation of the Macroeconomic Confidenceindex, the survey also evaluates the expectations, also for a one-year time horizon, for the inflation rate, interest rates, EUR/RON exchange rate, BET stock market index and global macroeconomic conditions.CFA Society Romania is an organisation of investment professionals in Romania, holders of the Chartered Financial Analyst (CFA) title, a qualification administered by the US CFA Institute.