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today, 3:05 pm
Author:
Dan Straut
OTP Asset Management experts anticipate GDP growth of 4% in Romania, with an inflation rate of 3.6% by the end of the year, and prospects for global growth are considered "still favorable" According to a report released Tuesday by the company.
"The bond investment portfolio was the return of inflation, and that of equity portfolios, by Value companies, to the detriment of growth. We will close the year with the values of the main international stock indexes above current levels, "the authors of the report say.
From a macroeconomic point of view, the global growth outlook remains favorable, the extremely weak monetary policy is over and more aggressive protectionist measures are emerging, the risks are increasing, "the authors stress.
"The euro area economy still looks healthy, expecting the labor market to improve domestic demand. Monetary policy remains lax, and healthy growth paves the way for another favorable GDP outcome at the European level in 2018. However, economic growth should slow down later as the normalization of monetary policy approaches. "
According to the specialists cited," it is important to point out that the prospect of a rise in interest rates is not a positive sign, especially for countries like the United States. Italy where the challenges of debt sustainability and the high political uncertainties prevail ".
As regards Romania, the report's authors note that "after disappointment in the first quarter, the economy is expected to recover later this year, with labor market conditions providing consumer support; but the stellar results of 2017 are hard to reach because external economic conditions have become less favorable, the impact of fiscal stimulus has faded, monetary policy is becoming stricter and so is the excellent harvest. from last year will probably not repeat itself.Romania's GDP growth in 2018 could reach 4% and is expected to slow down slowly in 2019. "
At the same time," inflation could reach its maximum around the current level and could fall to 3, 6% by the end of this year, because the base effect of some previous exceptional measures will disappear.In 2019, inflation can stabilize close to the 3% threshold, slightly above the NBR tolerance threshold, with labor market pressures remaining strong and consumer prices recovering globally. The benchmark rate is expected to reach 2.75% by the end of 2018 and could reach 3.25% by 2019.
According to OTP Asset Management, the deficit target of 3% of GDP for this year "This seems like a challenge, especially since the cash-based budget statistics were disappointing in early 2018." We believe that this year's budget deficit could reach about 3.8% of GDP. However, the government seems to be determined to achieve the deficit reduction goal. As a result, similar to 2017, corrective measures could be implemented to keep the gap close to the 3% ceiling, "warn the experts.
With regard to the l? trends in global financial markets, "it is increasingly clear that minimum bond yields in EUR, USD or RON were already recorded in previous years, and for the next period we are still waiting for interest rate increases. "The geopolitical shocks of the first part of the year have generated volatility in the bond markets, most affected by emerging market bonds, as well as higher risk corporate bonds." [19659004] In Romania, "pro-inflationary measures taken by the government lei state government bonds were slightly attractive, and they recorded corrections in the first half of 2018. local political noise, rumors about the freeze of contributions for Pillar II pensions in the second half and its possible option from 2019, legislative instability and rising inflation beyond expectations, all these are additional risks that have had a negative impact on Romanian state bonds, "says the report.
Since February, "volatility has returned to the international stock markets.So, the stock indexes were traded with high price swings.A significant influence on the evolution of the shares was the change of the policy. US to increased protectionism. "
OPT Asset Management also shows that in Romania the news relating to private Pillar II private pensions, accompanied by the evolution of the The main theme of investment of Romania for OTP Asset Management Romania, in the case of bond portfolios, was economic growth and the return of inflation – both in Romania and the United States – and a small-scale growth in the euro area. Under the conditions of global economic growth, we favored credit risk over interest rate risk. For equity portfolios, as early as January, we decided to invest in value companies at the expense of growth companies, while waiting for them to be better off for corrections. world. Investments have been directed to value-added companies in the US as well as worldwide, "says the report.
As in previous years, one of the major investment themes identified on the local market was the one of the attractive dividends offered by Romanian companies. "With the reappearance of news related to Pillar II of Pensions, we decided to reduce the exposure to Romanian companies, preferring to be under-exposed to the benchmark . In these conditions of high uncertainty, exposure to Romanian companies is at the lowest of the last 4 years, "say the specialists
." Given that corporate financial performance is up and the global economy is performing strongly, we expect to close the year with major international stock index values above current levels. With regard to bond portfolios, due to diverging monetary policies of the European Central Bank on the one hand and the Federal Reserve and the BNR on the other hand, we think that throughout the years In the year 2018, investment opportunities will be available in the EURRON and EURUSD trading zones. . We also believe that in the second half of 2018, there will be opportunities to increase the exposure on the Romanian government's securities, "show the specialists. According to them, the commercial war and the populist slippages constitute the main threat for the financial markets at the end of 2018.
Present on the local market in 2008, OTP Asset Management Romania SAI SA is ranked among the best fund managers of # 39; investment. Romania, by assets under management. At present, the company serves more than 8,200 investors, individuals and businesses, in nine open-ended investment funds.
OTP Bank Romania, a subsidiary of OTP Bank, the largest independent banking group in Central and Eastern Europe, is an integrated and self-financing provider of financial services. And OTP Group provides universal service to approximately 15 million customers in 9 countries through a network of approximately 1,400 units with an ATM network and advanced electronic services. OTP Bank is Hungary's leading financial services provider and a major player in the financial market in Central and Eastern Europe
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