Romania - The index of trust in economy is on the rise in August

The index of trust in Romanian economy is on the rise in August, as consumers' expectations rose and prospects of retail trade and constructions are more optimistic, according to a monthly poll of the European Commission.

At the same time, the prospects in industry remain unchanged compared to the preceding month, and trust in the services sector dropped. Thus, the index of trust in the economy rose at 76.4 points in August, compared to 75 in July, marking the third consecutive month in which the perception of Romanian economy changed for the better.•Nonetheless, Romania ranks last but one in the European Union according to this index, taking precedence only over Greece (67.9 points). The countries boasting the highest index of trust in the economy are Sweden (115.4 points) and Germany (111.2 points).•Managers in industry were more optimistic about their order books; in particular they were upbeat about their export order books. Managers' assessment of production observed in recent months and production and employment expectations remained unchanged.

Meanwhile, managers' assessment of their stocks of finished products worsened slightly. After the surge in July, the Economic Sentiment Indicator (ESI) continued to improve in both the EU and the euro area, albeit at a slower pace. The ESI rose to 102.7 (up by 0.6 of a point) in the EU and to 101.8 (up by 0.7 of a point) in the euro area. In both the EU and the euro area the ESI is above its long-term average.•This opinion is not shared by Harvard University professor Kenneth Rogoff, who is expecting a few eastern European countries to go bust in the next two to three years, 'Profil' magazine reported, quoting an interview, Mediafax informs. Not everyone will survive the consolidation of state budgets, Rogoff told the Vienna-based magazine.

Ukraine, Romania and Hungary are "potential wobblers," Rogoff said, adding that it is impossible to predict which countries may go bust. Due to its close ties with Eastern Europe, the situation will create a "real stress test" for Austria, 'Profil' quoted Rogoff as saying.

This is not the first time when Rogoff makes such statements. Earlier this year, in an interview to Austrian newspaper 'Der Standard,' Rogoff again identified Romania as a country at risk of bankruptcy, along with Ukraine, Latvia, Hungary and Greece.

The professor of Economics said then that IMF money only bought time for countries in the region, which could save only if tough reforms strengthen financial support to the spending side.

Romania was often identified as a state with a high degree of risk. In the last five months, for example, Romania's first venture was often among the countries with the highest risk ranking according to CMA DataVision.

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