The Romanian economic sentiment indicator ESI is at a twelve-month high

On By Vaseline

The Economic Sentiment Indicator (ESI), calculated by Eurostat for Romania (105.1), reached its highest value in twelve months in April.

This means that managers and consumers expressed more positive views or expectations to a greater extent than the long-term average.

“Based on the ESI data, we can expect a sequential (q/q) increase in the first quarter of 2024 as the average index was above that of the previous quarter. This is also our base case. The positive momentum seems to continue into the second quarter, given the ESI data for the first month (of the second quarter),” said Vlad Ioniță, BCR analyst, quoted by Profit.

The average ESI index in the EU has been stable over the past five months (96.2 in April) after weaker figures for most of 2023 – with the figure revealing views or expectations that are more pessimistic than the long-term average. ESI is not directly comparable between countries.

Romania’s ESI increased from 99.0 last May and was above trend range in April.

Confidence indicators reached their annual peak in April 2024 in all five sectors covered by the ESI: industrials (with a weight of 40%), services (30%), consumer (20%), retail (5%) and construction (5 %).

The confidence indicator in the sector recorded a positive value (0.3) for the second time in twelve months. Although the indicator remained negative (-13.5), the consumer confidence indicator was also the strongest in twelve months. Executive confidence in retail (12.1) and services (8.4) was particularly robust.

The ESI is a weighted average of responses to selected questions addressed to companies in five sectors covered by the EU Business and Consumer Surveys and to consumers. The sectors involved are industry (weight 40%), services (30%), consumers (20%), retail (5%) and construction (5%). The ESI is scaled to a long-term average of 100 and a standard deviation of 10. Values ​​above 100 therefore indicate above-average economic sentiment and vice versa.

Confidence indicators are produced as the arithmetic mean of the (seasonally adjusted) responses to selected questions, chosen from the entire set of questions in each individual survey; Balance ranges are the difference between positive and negative answer options, measured as percentage points of the total number of answers.

(Photo: Diony Teixeira/Dreamstime)

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