The economy enters the alert zone: prolonged stagnation, persistent inflation, large deficits and low confidence

The Macroeconomic Confidence Indicator calculated by the CFA Romania Association stagnated in September 2025, maintaining a level associated with recessionary conditions, explains Adrian Codirlașu, president of the Association.

He also warns that both the level of the indicator and its two components continue to show a fragile economy, with major risks coming from fiscal policy.

“For the first time in this inflationary episode, most analysts anticipate a decrease in the inflation rate compared to the current level. However, the disinflationary process will be slow. And the fiscal policy remains the main risk for inflation in the next year as well,” declared Codirlașu.

Economy in stagnation, confidence below 40 points

The overall indicator increased slightly — only +0.3 points compared to August — but its two components evolved divergently:

• Current conditions fell 4.8 points to 38.6

• 12-month expectations rose 2.8 points to 37.0

Both values ​​remain well below the threshold of 50, which separates positive from negative perception – a clear signal of economic pessimism.

Inflation remains high, but pressures are easing

Analysts estimate for September 2026 an average inflation rate of 7.18%, compared to 9.88% currently. Although more than 60% of respondents believe that inflation will fall, no one anticipates a quick return to the BNR's target of 2.5%.

Disinflation exists, but it is slow — a combination of still high demand, high budget deficits and wage costs that are growing faster than productivity, also shows the release of CFA Romania, an association that brings together the most titled financial analysts.

The leu under pressure, rate above 5.18 lei/euro in 2026

88% of analysts anticipate depreciation of the leu in the next 12 months. Average forecasts are:

• 5.1216 lei/euro over 6 months

• 5.1841 lei/euro over 12 months

This trend reflects both external pressures and rising domestic deficits and public debt.

• The budget deficit and public debt, at critical levels

The most notable change in the survey: Budget deficit expectations for 2025 rose sharply to an average of 8.6% of GDP – nearly a point above last year's estimates.

At the same time, public debt is projected to rise to 59% of GDP in the next 12 months, which would bring Romania closer to the fiscal alert thresholds imposed by the EU.

“The budget deficit is the main systemic risk. In the absence of fiscal consolidation, the pressure on the exchange rate, on interest rates and on the sovereign rating will continue,” warns CFA Romania.

Minimal economic growth and risks of recession

For 2025, analysts anticipate real economic growth of just 0.8%, with an alternative scenario — discussed by several participants — of technical entry into recession.

Government bond yields (in lei) remain at high levels:

• 7.27% over 10 years

These values ​​suggest that the markets still demand a high risk premium to finance Romania's debt.

• The real estate market: stagnation and strained valuations

61% of analysts expect house prices to stagnate over the next 12 months.

Half of respondents believe current prices are overvalued, and 46% believe they are fairly valued — a sign of a “freeze” in the market after the accelerated increases of recent years.

Country rating under observation

A new question in the survey concerned the perception of the risk of Romania being relegated to the “junk” category (not recommended for investment). The result: 83% of analysts believe that Romania will retain its investment grade rating in the next 12 months — but the margin of safety is visibly shrinking.

The CFA Romania indicator has been published monthly for over 14 years and quantifies the anticipations of investment professionals on the Romanian economy for a 12-month horizon.

The score ranges from 0 (total lack of confidence) to 100 (full confidence).

Participants are holders or candidates for the Chartered Financial Analyst (CFA®) title — one of the most prestigious financial certifications globally.

The CFA Romania Association brings together over 270 members and 140 candidates, working in banks, investment funds, regulatory authorities and international companies.