Romania's annual inflation could reach 8.5% in March and temper in April, central bank says

Romania's annual inflation could hike to 8.5 percent in March considering that the currency exchange rate has just become stable, agriculture cannot have a positive contribution yet and energy prices continued hiking, governor of the central bank, Mugur Isarescu said.

However, the monthly inflation rate could lower year-on-year in April, according to Isarescu.

"The monthly inflation cannot be lower than 0.5 percent in March but it could drop in April," Isarescu said.

The governor estimated inflation to stand between 5 and 6 percent at the end of 2008. The most recent projection of the central bank anticipated a 5.9 percent level of the annual inflation in December 2008.

As far as the pressure coming from salary hikes in different sectors is concerned, the governor explained the central bank can only warn about risks of salary hikes in general but not interfere with disputes regarding salaries.

Among the factors that could threaten the disinflation process in the coming years, Isarescu pointed the moves of volatile prices, the adjustment of administrative prices, the still strong local demand and potential external shocks, especially coming from prices for petroleum and commodities on foreign markets.

NewsIn