CFA Romania’s macroeconomic confidence index dropped for the third month in a row, reaching 47.2 points in August, 8.5 points below the July level. Expectations about the economy deteriorated the most, with this index component losing 10.1 points. The component assessing current conditions lost 5.2 points.
Analysts’ confidence started decreasing again in June, after having hit an all-time high in May. The declines deepened, especially in terms of expectations.
The Romanian economy entered technical recession after two quarters of consecutive declines. The economic growth pace in 1H, 2014 against the first six months of 2013 stood at just 2.4%, way below analysts’ expectations, which also dragged down expectations about the entire year.
According to the CFA report, most analysts expect business environment and labor market conditions to worsen. The upcoming elections are generating political tensions, which can also hurt perceptions about Romania’s economic environment.
The macroeconomic confidence index ranges from 0 (no confidence) to 100 (full confidence in Romania’s economy) and is calculated based on six questions about the current business and labor market conditions, as well as expectations for a timeframe set at one year.
(English version by Catalina Apostoiu)