CFA Romania analysts cut their one-year inflation rate expectations to 7.73 pct

CFA Romania analysts continued to lower their one-year ahead inflation rate expectations to an average of 7.73 percent, the lowest since March 2022, the CFA Romania Association said.

As regards the euro to RON exchange rate, 85 percent of the participants in the organization's monthly survey expect the domestic currency to lose ground in the next 12 months, with the average projection over a 6-month horizon standing at 5.0146 RON for one euro, and that over a 12-month horizon being 5.0719 RON for one euro.

Analysts expect economic growth to fall to 2.7 percent this year, from 4.7 percent in 2022, and a budget deficit of 4.8 percent at the end of the year, compared to 5.7 percent in 2022.

Public debt is expected to widen to 54 percent of GDP in the next 12 months.

Regarding the evolution of urban residential property prices, 61.5 percent of the participants in the survey anticipate they will remain stable, while 38.5 percent expect them to decrease in the next 12 months, with no opinion of price increases being expressed. Also, 46 percent of the respondents consider that the current prices are overvalued, while 54 percent consider them to be correct.

"According to the results of the survey, the disinflationary process continues, with inflation expectations standing at the lowest since 2013. Projections of a slight reduction in interest rates are consistent with these disinflationary expectations. However, in this economic cycle, both the inflation rate and interest rates will settle at significantly higher values than those recorded between the two crises: the subprime and the corona crisis," said vice-president of the CFA Romania Association Adrian Codirlasu.

The Association's Macroeconomic Confidence Indicator increased this May by 4 points to 59 pints, due to its projection component, which advanced by 8 points to 56.7.

The CFA Romania Association has been carrying out this monthly survey for 12 years now, as an indicator whereby the organization attempts to quantify the anticipations of financial analysts regarding Romania's economic activity over a one-year horizon. The survey is conducted in the last week of each month and the participants are members of the CFA Romania Association and candidates for levels II and III of the CFA exam.

CFA Romania is the association of Romanian investment professionals who hold the certification of Chartered Financial Analyst (CFA), a credential granted by the US-based CFA Institute. The association currently has over 250 members.