Key Points:
CFA Romania financial analysts predict a leu depreciation to an average exchange rate of 5.0719 lei/euro in the next 12 months.
The anticipated inflation rate is expected to reach an average of 5.73%, up from 5.33% in the previous survey.
For the 6-month horizon, nearly 88% of financial analysts in the monthly survey anticipate an exchange rate of 5.0172 lei/euro.
The CFA's macroeconomic confidence index fell by 12.3 points to 47.1 points in April, driven by declines in both components of the index.
The state budget deficit for 2024 is forecast (average forecast value) at 5.7%, up from 5.4% in the previous survey.
Economic growth expectations have been reduced by 0.8 percentage points to 1.9% compared to the previous survey.
The 3-month ROBOR index, used to calculate variable interest rates on leu-denominated loans taken out before May 2019, is expected to reach 5.94% in the next 12 months.
Regarding the evolution of residential property prices in cities, the majority of participants, 53%, anticipate a decrease in the next 12 months, while 23.5% anticipate an increase in prices and the remaining 23.5% expect stability.
Also, 70% of participants consider current prices to be overvalued, while 30% consider them to be fairly valued.
Conclusion:
Business confidence in Romania has taken a significant hit, as reflected in the decline of the CFA's macroeconomic confidence index. Financial analysts are projecting a moderate economic growth rate of 1.9% for 2024, accompanied by a widening budget deficit and persistent inflation. The leu is expected to depreciate further against the euro in the coming months, while real estate prices may experience a slight downward adjustment.
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