Analysts believe the main factors causing an increase in inflation are electricity and natural gas prices followed by increases in raw material prices.
Asked about the risk of stagflation (i.e. high inflation, high unemployment and slow or negative real economic growth) over the next 12 months”, 62% of analysts say there is moderate risk and 27% see major risk.
At the same time, 47% of participants in the survey also expect the benchmark interest rate to range between 3% and 4% at end-2022 and a little over one third of them forecast a 4-5% rate.
Data collected by AAFBR also shows the yields for ten-year bonds are envisaged at 6-8% at end-2022, while the Romanian leu is projected to reach 4.95 to 5.05 units to the euro (45% of analysts) and 5.06 to 5.15 units per euro (45% of analysts).
Most analysts also expect Romania’s economic growth to not exceed 4% in 2022, with half of participants in the survey expecting a 2-4% GDP growth and 38% of them forecasting a GDP growth of just 0-2%.
The survey was conducted between March 22 and April 8, 2022 and polled 55 members of the association.