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CFA Romania Association: Inflation could drop below 10% in October 2023 as expectations continue to decrease

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CFA Romania Association analysts believe that inflation in Romania could fall below 10% from October 2023, while the country’s real GDP growth for 2022 is estimated at 4%, and the government deficit at 6.1%, according to Agerpres.

According to a Tuesday press release, CFA Romania Association’s Macroeconomic Confidence Index dropped significantly in September, to 34.7 points. This situation was due to a drop by 12.5 points in the inflation expectation component and by 8 points in the current conditions component. The anticipated rate of inflation for the 12-month horizon went down to an average of 9.59%.

„Amid expectations for a strong slowdown in the global economy, the macroeconomic confidence index underwent a significant decrease, in line with the decrease to historical lows of confidence indicators at the global level. Inflation expectations continued to decrease, indicating the possibility that the inflation rate will decrease below 10% from October 2023,” according to CFA Romania Association Deputy Chairman Adrian Codirlasu.

Regarding the EUR/RON exchange rate, over 81% of the respondents are expecting the local currency, the leu to depreciate in the next 12 months against the European single currency from its current value. Thus average exchange rate according to anticipations is EUR/RON 5.0117 for the 6 months horizon and 5.0797 for the 12 months horizon.

At the same time, around 72% of the participants in the survey anticipate a decrease in the prices for residential properties in the big cities, while 78% of the participants consider these prices to be overblown.

Regarding the anticipated national government deficit for the year 2022, the average value of the anticipations decreased to 6.1%. The anticipated evolution, in real terms, of GDP in 2022 was slightly reduced to 4%.

The 3-month ROBOR index, based on which the cost of RON-denominated consumer loans at variable interest is calculated, is estimated at 7.39%.

Agerpres

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