The confidence indicator rose in July, amid the confirmation of Romania's investment-grade rating by rating agencies, but the economy will continue to stagnate, pointing to a high risk of recession, according to Adrian Codirlasu, President of CFA Romania.

'The confidence indicator rose in July, amid the confirmation of Romania's investment-grade rating by rating agencies. In line with the improvement in confidence in the economy, inflation expectations also improved significantly. Exchange rate and interest rate expectations moved in the same direction. However, the economy will continue to stagnate, with the risk of recession remaining,' Adrian Codirlasu is quoted as saying in a press release sent to AGERPRES on Wednesday.

The CFA Romania Macroeconomic Confidence Indicator rose 6.7 points in July to 44.2 points. The Current Conditions Indicator increased 8.1 points to 36.9 points, while the Expectations Indicator advanced 6.1 points to 47.9 points.

Expected inflation over the 12-month horizon (August 2027) fell from the level recorded in the previous survey to 6.32%, while 90% of participants expect the inflation rate to decrease over the next 12 months compared with its current level.

Regarding the EUR/RON exchange rate, 84% of participants expect the leu to depreciate over the next 12 months, while 16% expect it to remain unchanged. The average expected exchange rate for the six-month horizon is 5.2901 lei per euro, while for the 12-month horizon the average expected EUR/RON exchange rate is 5.3445 lei per euro.

Meanwhile, the CFA Romania survey forecasts that the economy will stagnate this year and that the budget deficit will stand at 6.2% of GDP.

'The forecast general government budget deficit for 2026 fell 0.2 percentage points compared with the previous survey, reaching an average expectation of 6.2% of GDP. Economic growth expectations for 2026 remained around 0%, indicating a high risk of recession. Public debt as a percentage of GDP is expected to rise to 63% over the next 12 months,' CFA Romania said.

Regarding residential property prices in cities, 69% of participants expect them to remain unchanged over the next 12 months, while 21% expect a decline. In addition, 74% of participants consider current prices to be overvalued, while 11% believe they are fairly valued.

Against the backdrop of the war in Iran, a question was also added regarding expectations for the price of Brent crude over the next 12 months. According to the responses, participants expect an average price of 87 dollars per barrel.

'However, uncertainty remains extremely high,' the CFA survey reveals.

CFA Romania is the organisation of investment professionals in Romania who hold the Chartered Financial Analyst designation, a qualification administered by the CFA Institute (USA). The association currently has more than 265 members holding the CFA designation. AGERPRES (RO - writing by: Mariana Nica; EN - writing by: Adina Panaitescu)