Inflation forecast- The central bank speaks of wider inflation in 2008 and a slow down next year

Joi, 08 Mai 2008, 00:00

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The Central Bank of Romania (BNR) revised to 6 percent the inflation prognosis for this year’s end and estimates prices growth will brake in 2009, BNR governor Mugur Isarescu said.

The inflation prognosis for 2009 was changed from 3.9 percent to 3.5 percent (+/- 1 percent). Isarescu believes a good agricultural year could offset the risks concerning a high inflation.

These risks refer to salary increases exceeding labor productivity, the fall of the leu owing to international turmoil and lower-than-expected budget collections.

Isarescu said the risk for the depreciation of the leu still exists, yet the currency took a waving path, fluctuating between 3.50 and 3.70 lei.

Consumer prices upped 8.63 percent from March 2007 to March 2008, a record high since January 2006; the increase, which beat the analysts’ estimates, came after the price of services, fuels and some food products grew.

The 8.63 percent inflation seen in March could be this year’s maximum level yet, the annual inflation will revolve around this level in the following months and should start to narrow beginning with July, Isarescu formerly said.

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