Romanians' confidence level boosts, GfK study shows

In the first quarter of this year, the index of public confidence measured by the Consumer Confidence Barometer conducted by GfK for the European Commission registered an increase as compared to last year’s average, reaching -46 from -54. Compared to the same period in 2010, when this index stood at -48, Romanians prove somewhat more confident at the beginning of this year.

“I believe that this slight recovery of the optimism is based on increasing public sector wages by 15 percent, but also on the declarations of the authorities regarding the country’s impending exit from the crisis. On the other hand, it is probably a sign that Romanians are tired of being the champions of pessimism and they look more and more at the glass as half full. In Europe’s developed countries one can already see the signs of economic recovery, which gives us hope that in the not too distant future we will also feel these improvements,” said Andi Dumitrescu, General Manager of GfK Romania.

However, the current situation of the family finances is not one of the most encouraging, with an average 67 percent Romanians declaring in the first three months of the year that things are worse than in the previous year, the pessimism level thus remaining relatively stable against the average of 2010. However, the Romanians look with more confidence towards the future, as only 43 percent state that they expect their financial situation to worsen in the next 12 months, compared with over half of them who were saying the at the level of the entire year 2010. 15 percent hope that their situation will improve in the coming year, while 36 percent expect it to remain the same as at present. The percentages are in fact comparable to the situation in the first three months of 2010, when the “darkest” effects of the crisis had not yet shown.

Almost 84 percent of respondents said that the general state of the economy saw a decline in the last 12 months, while expectations for the next year are somewhat higher, only 56% declaring themselves pessimistic. More than half of Romanians (56 percent) admit that they can hardly cover their current expenses, while a quarter say they have debts, a percentage that remains a record for recent years.

Confidence in job stability also shows a slight rebound, reaching the highest levels since the onset of the crisis in Romania. 73 percent of respondents estimate the unemployment rate will rise, while almost 7 percent even anticipate a decrease.

On the other hand, views on inflation, both for the past year and the following one, are among the worst in the last decade. 93 percent of Romanians observed in March that prices had increased in the previous 12 months, while 8 in 10 Romanians expect the same to happen in 2011.

The current period seems not to be a favorable one for savings or major investments, either. More than 8 in 10 Romanians say that they do not intend to put money aside in the next year, a situation that has not changed very much compared with the average of 2010. In addition, more than two thirds believe that it is not a good time to invest.

The information comes from the Consumer Confidence Barometer, a study that is co-financed by the European Commission and conducted monthly by GfK Romania. The data are representative of Romania’s population aged 15 and over, the sample being of 1,000 people interviewed each month.