January 26 (SeeNews) - CFA Romania, an association of investment professionals, said on Thursday that the state of the country's economy is expected to worsen in the next 12 months.
Romania's macroeconomic confidence indicator decreased to 61.3 points in December, down 4.3 points from the previous month, mainly as a result of expectations of worse economic conditions in 2017, CFA Romania data showed. The analysts' expectations for the next 12 months in regards to Romania's economic situation dropped to 54.5 points in December, down by 5.4 points compared with November.
The analysts' perception of the current economic situation in Romania also worsened in December, by 2.3 points to 75.0 points.
On Monday, Romania's government said this year's budget draft is based on projections for 5.2% economic growth and envisages a deficit of 2.99% of GDP under the European System of Accounts (ESA) standards. In the eleven months through November, Romania's consolidated budget showed a deficit equivalent to 0.73% of the GDP projected for 2016. Romania's economy expanded by 4.3% year-on-year in the third quarter of 2016, slowing down from 6.0% annual growth in the second quarter, while in the first nine months of 2016 the economy grew by 4.8% year-on-year.
Also, CFA analysts said they are expecting, on average, inflation of 1.50% in the period January 2017- January 2018, down from 1.85% projected in November.
Romania's annual consumer price deflation decelerated to 0.5% in December, from 0.7% in November. In its latest inflation report issued in November, Romania's central bank BNR raised to 2.1% its 2017 inflation projection. The country ended 2015 with deflation of 0.9%.
The analysts expect an exchange rate of 4.5 lei per euro in the next six months and in 2018, down 100 pips from the previous survey.
Also, 67.9% of analysts said they expect global economic conditions to be normal, while 28.6% an unfavourable situation and only 3.6% are optimistic.
The CFA Society Romania Macroeconomic Confidence Index, first released by CFA Society Romania in May 2011, represents an indicator that aims at quantifying financial analysts' expectations about economic activity in Romania for a time horizon of one year.
The Index takes values between 0 (no confidence) and 100 (complete confidence in the Romanian economy) and is calculated based on six questions regarding current conditions of business and labor market; expectations about business, labour market, personal income and personal wealth.
(1 euro = 4.4983 lei)