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CFA Romania analysts raise 2021 GDP growth forecast to 7.2%

CFA Romania analysts raise 2021 GDP growth forecast to 7.2% source: SeeNews

BUCHAREST (Romania), September 27 (SeeNews) - CFA Romania, an association of investment professionals, said it expects the country's gross domestic product (GDP) to grow by 7.2% in 2021, and the budget gap to be equivalent to 6.8% of GDP.

Public debt could reach 53% in the following 12 months, CFA said in its latest monthly survey of economic confidence on Friday.

In its previous survey published in August, CFA analysts forecast a GDP rise of 6.9% in 2021 and a 6.6% budget deficit. CFA analysts' latest expectations are close to those of the government, which targets 7% GDP growth in 2021 and a 7.16% budget deficit.

The CFA macroeconomic confidence index fell to 73.6 points in August, compared to 74.5 points in July, and was 40.3 points higher compared to the value in the same month of last year.

"Against a background of caution generated by the fourth wave of the coronavirus pandemic, the macroeconomic confidence indicator dropped for the second consecutive month, but remains at a high level, close to the historical maximum, which indicates confidence in future economic developments," CFA Romania vice president Adrian Codirlasu said.

The CFA analysts said they expect, on average, inflation of 4.38% for the next 12 months. Romania's consumer prices rose 5.25% year-on-year in August, compared to an increase of 4.95% in July, according to national statistical office data.

Analysts expect an exchange rate of 5.0196 lei per euro in the next six months and 5.0672 lei per euro in the next 12 months. The central bank, BNR, set its reference exchange rate at 4.9495 lei per euro on September 22, when the Romanian leu weakened to an all-time record level against the euro amid increased political uncertainty. The leu has been weakening since the beginning of September after ministers of the centre-right bloc formed by USR and PLUS parties, a junior partner in the governing coalition, resigned.

The CFA Society Romania Macroeconomic Confidence Index, first released by CFA Society Romania in May 2011, is an indicator that aims at quantifying financial analysts' expectations regarding economic activity in Romania for a year. The index takes values between 0 (no confidence) and 100 ​(complete confidence in the Romanian economy) and is compiled based on six questions regarding current conditions of business and labour market; expectations about business, labour market, personal income and personal wealth.

(1 euro=4.9488 lei)