On the other hand, economic conditions are starting to improve, economic growth will return, inflation will decline, interest rates will fall, wages will rise and become real positive, consumption will pick up after two years of decrease and companies will start investing again.
This is the conclusion of UniCredit’s report for CEE, presented at the Euromoney conference in Vienna.
However, this fiscal excess of 2024 and the need of some fiscal corrections will come in 2025 and 2026, says Dan Bucsa, the chief economist for CEE at UniCredit.
Until then, the bank’s report points out the economic situation of this region is better than perceived, investors watching and investing in this region have a positive sentiment and people are starting to spend again after the two years of austerity brought about by inflation and interest hikes.
Inflation and interest rates will fall, but less than estimated, but there will be a decline, though, said Dan Bucsa.
FDIs will start rising again and companies will be one way or another forced to resume investments, the more so as their financial footing is good, he added.
For Romania, the budgetary gap remains the biggest risk, but at least for now there is no alarm signal from the part of analysts and investors, but on the contrary.
In the case of Romania, the rising populist rhetoric does not seem to be a worry for investors and Dan Bucsa says that historically, in European parliament elections populist parties win, but then in local, parliamentary and presidential elections they lose momentum.
This is also likely to happen in Romania during this year’s elections.
(English version by Catalina Apostoiu)