Romania’s annual inflation rate may spike to 3.9% at the beginning of next year and then gradually fall to 3.2% by the end of 2018, central bank governor Mugur Isarescu said yesterday.

Romania’s National Bank (BNR) has also revised upwards its inflation rate forecast for the end of this year, to 2.7%. Future measures affecting fiscal policies and the people’s revenues may cause deviations from the projected inflation path, according to BNR.

Governor Isarescu said that the central bank is preoccupied with the impact of the Government’s future measures to implement the governing program and keep the budget deficit under control. While the Government continues to adopt procyclical measures, the central bank has started pressing the break, Isarescu said. He added that the Government should also do the same, because monetary policy alone can’t counterbalance economic policies that amplify inflation.

However, he said that the international context is still helping Romania maintain a balanced situation.

BNR decided on Tuesday to maintain the monetary policy rate unchanged at 1.75% per year.

Romanian central bank governor warns of inflation spike early next year

editor@romania-insider.com