RRI Live!

Listen to Radio Romania International Live

A Central Bank report on inflation

The National Bank of Romania has revised upward its inflation rate forecast for the end of this year from 1.1% to 1.4%

A Central Bank report on inflation
A Central Bank report on inflation

, 10.02.2016, 14:23

The National Bank of Romania has revised upward its inflation rate forecast for the end of this year from 1.1% to 1.4%, anticipating an inflation rate at the end of 2017 of 3.4%, which is close to the upper limit for the period targeted by the national bank, namely 1.5 % and 3.5%.



The periodical report on inflation presented by the governor of the National Bank of Romania, Mugur Isarescu, reconfirms the prospects of inflation going into a negative area in the first five months of 2016, as a result of the cuts in the VAT and other indirect taxes.



According to governor Isarescu, inflation will subsequently stabilize at positive levels, once the effects of the VAT reduction for food stuffs and services fade out and also against the background of a relaxed fiscal policy and of rising unitary costs for salaries. The governor points out to the fact that the monthly fluctuations in consumer prices have become positive again and that there are many prices still on the rise.



Mugur Isarescu: “With the exception of June, when food prices went down thanks to the VAT cut, before that time but also until December and probably in the future as well, in Romania prices are still increasing rather than dropping. Hence the population’s perception, which should not be blamed, that prices are still on the rise.”



This upward trend has been caused by several factors, such as the less- significant- than-expected cut in fuel prices, price hikes for farming raw products, given the low harvests across the EU, the latest depreciation of the national currency as well as the atypical price hike for tobacco products.



According to the Central Bank, domestic uncertainties mainly concern the rising inflation, being related mainly to the fact that a budget has been approved for 2016 with a deficit close to the 3% ceiling, that pressure continues to be put for rising budget expenses and that the income policy is on a staunch rising trend. Furthermore in the opinion of the central bank governor, the recently approved pay rises aren’t correlated with improved productivity.



Mugur Isarescu: “Productivity of work in industry does not support this wage dynamics, which is necessary, or structural reforms meant to bring about an increased productivity of work or the containment of these pay rises so that this correlation may not break at a certain time.”



Isarescu has also said that a significant rise in consumption has been noticed of late, particularly in terms of food stuffs, as well as an increase in loaning thanks to low interest rates and the Romanians’ shift towards loans in the local currency.



External influences seem to point out towards balanced risks, but that doesn’t mean that the Central Bank is not taking into account major uncertainties currently hindering international developments, and which are suggesting a very difficult year 2016.


Photo: pixabay.com
Today in the News Thursday, 24 April 2025

A new law on the magistrates’ pensions

There are several occupational categories in Romania whose employees are usually retiring under the age of 50 and whose pensions aren’t exclusively...

A new law on the magistrates’ pensions
Foto: Mediamodifier / pixabay.com
Today in the News Thursday, 24 April 2025

Downward forecast revision from the World Bank

According to its latest report, the World Bank expects growth in developing economies in Europe and Central Asia to slow down to 2.5% in 2025-2026...

Downward forecast revision from the World Bank
Photo: Septimiu / pixabay.com
Today in the News Wednesday, 23 April 2025

From budget deficit to governmental debt

  The Romanian finance ministry reiterates Romania’s commitment to meet the 7% of GDP deficit target at the end of the year, and promises...

From budget deficit to governmental debt
Ambasadorul Germaniei la București, Peer Gebauer, alături de ministrul de Externe, Emil Hurezeanu / Foto: MAE.ro
Today in the News Wednesday, 23 April 2025

Romanian – German Friendship Day

A year ago, former Romanian President Klaus Iohannis, himself an ethnic German from Transylvania, promulgated the Law establishing April 21 as...

Romanian – German Friendship Day
Today in the News Tuesday, 22 April 2025

Romania reacts to the Pope’s Death

Pope Francis passed away on Monday, the second day of Easter, after 12 years of pontificate, and the emotion caused by his disappearance crossed the...

Romania reacts to the Pope’s Death
Today in the News Thursday, 17 April 2025

Christians before Easter

The Orthodox Christians in Romania are preparing to celebrate Easter – the feast of light and joy, considered the greatest celebration of...

Christians before Easter
Today in the News Wednesday, 16 April 2025

Strategic partnership reaffirmed

  With a new administration led by the Republican Donald Trump that excels in unexpected moves, the United States has in Congress an institution...

Strategic partnership reaffirmed
Today in the News Wednesday, 16 April 2025

NATO continues to support Ukraine

NATO’s Secretary General visited Ukraine and the Republic of Moldova.   NATO Secretary General Mark Rutte on Tuesday made a surprise visit...

NATO continues to support Ukraine

Partners

Muzeul Național al Țăranului Român Muzeul Național al Țăranului Român
Liga Studentilor Romani din Strainatate - LSRS Liga Studentilor Romani din Strainatate - LSRS
Modernism | The Leading Romanian Art Magazine Online Modernism | The Leading Romanian Art Magazine Online
Institului European din România Institului European din România
Institutul Francez din România – Bucureşti Institutul Francez din România – Bucureşti
Muzeul Național de Artă al României Muzeul Național de Artă al României
Le petit Journal Le petit Journal
Radio Prague International Radio Prague International
Muzeul Național de Istorie a României Muzeul Național de Istorie a României
ARCUB ARCUB
Radio Canada International Radio Canada International
Muzeul Național al Satului „Dimitrie Gusti” Muzeul Național al Satului „Dimitrie Gusti”
SWI swissinfo.ch SWI swissinfo.ch
UBB Radio ONLINE UBB Radio ONLINE
Strona główna - English Section - polskieradio.pl Strona główna - English Section - polskieradio.pl
creart - Centrul de Creație Artă și Tradiție al Municipiului Bucuresti creart - Centrul de Creație Artă și Tradiție al Municipiului Bucuresti
italradio italradio
Institutul Confucius Institutul Confucius
BUCPRESS - știri din Cernăuți BUCPRESS - știri din Cernăuți

Affiliates

Euranet Plus Euranet Plus
AIB | the trade association for international broadcasters AIB | the trade association for international broadcasters
Digital Radio Mondiale Digital Radio Mondiale
News and current affairs from Germany and around the world News and current affairs from Germany and around the world
Comunità radiotelevisiva italofona Comunità radiotelevisiva italofona

Providers

RADIOCOM RADIOCOM
Zeno Media - The Everything Audio Company Zeno Media - The Everything Audio Company