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February 19, 2019

Confidence in Romanian economy deteriorates in May

Companies’ and consumers’ confidence in Romanian economy, an index calculated monthly by the European Commission (EC), has deteriorated in May compared to April, reversing the trend after four months of improvement, Mediafax informs. Suppliers of services, retailers and consumers are the most worried. Thus, the Economic Sentiment Indicator (ESI) for Romania dropped from 83.6 in April to 76.4 in May after reporting timid growth in the first four months of the year (up from 80 in December last year). Thus, the confidence index has returned slightly below the level reported in November last year.

While the confidence index stagnated in the industrial and constructions sectors (at -10 and -41 respectively) at values that show pessimism and worry among the companies concerned, the results of the polls conducted among consumers and within services and retail sectors reported poorer results compared to April. Thus, after reaching a slightly positive level in April (1), the confidence index within the services sector dropped to -13 in May, while in the retail sector the indicator dropped from -3 to -11.

As usual throughout recession, Romanian consumers have remained the most pessimistic among consumers interviewed by the EC on a monthly basis. The consumer confidence index dropped from -47 in April to -56 in May, a level that suggests the population’s significant worry in what concerns the economic outlook. At European Union level the ESI index also dropped for the first time after a long period, from 100 in April to 98.4 in May. The drop was nevertheless partially influenced by a change in surveys’ methodology, the EC warns, pointing out however that the change does not affect the trend but only the magnitude of fluctuations. In the EU the confidence index continued to improve in May within the industrial sector but deteriorated in all other sectors. Consumers expressed increasing worries about the economic situation, however they improved their views in what concerns the labour market.

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