Romania’s Macroeconomic Confidence Indicator (chart) compiled by the CFA Romania Association increased by 6.7 points to 44.2 in July, recovering from a low reached in May as rating agencies confirmed the country’s investment-grade status. Despite the improvement in sentiment, CFA analysts expect the economy to stagnate in 2026, with the risk of recession remaining elevated.

The indicator had fallen to its lowest level in recent years in May amid Romania’s political crisis, but has since recovered despite the absence of a full political normalisation. The current conditions indicator rose by 8.1 points to 36.9, while the expectations indicator increased by 6.1 points to 47.9, moving closer to the 50-point threshold associated with normal economic conditions.

The CFA Romania Association said the improvement in confidence was accompanied by a significant decline in inflation expectations, alongside more favourable expectations for the exchange rate and interest rates. The average inflation expectation for the next 12 months, to August 2027, fell to 6.32%, with 90% of survey participants expecting inflation to decline from its current level.

Expectations for the Romanian leu remain negative. Some 84% of participants anticipate a depreciation against the euro over the next 12 months, while the remaining 16% expect the exchange rate to remain broadly unchanged. The average forecast stands at RON5.2901 per euro over six months and RON5.3445 over 12 months.

The survey also points to continued pressure on public finances. The average forecast for Romania’s 2026 budget deficit was reduced by 0.2 percentage points from the previous survey to 6.2% of GDP, while public debt is expected to reach 63% of GDP over the next 12 months.

Economic growth expectations for 2026 remained close to zero, indicating a high risk of recession despite the recovery in confidence. The residential property market is similarly expected to remain weak, with 69% of respondents forecasting broadly unchanged prices in Romanian cities over the next 12 months and 21% expecting a decline. Some 74% consider current prices overvalued.

The survey also included expectations for Brent crude following the war in Iran. Participants forecast an average price of $87 per barrel over the next 12 months, although CFA Romania said uncertainty around the forecast remains extremely high.