Consumer prices increased by 1.8% in March, dragged up by a 2.54% advance in the food prices. The annual inflation rate advanced to 10.2% YoY compared to 8.5% YoY in February, the statistics office INS announced.

The advance was steeper than expected, even if the National Bank of Romania (BNR) announced an upward revision of the projected inflation forecast, and it will predictably accelerate the monetary policy tightening.

"Inflation accelerated above the median of the Bloomberg poll of 9.60% and above our 9.59% forecast. The forecast error on our side came almost exclusively from basic foods," according to Ciprian Dascălu, chief economist of BCR.

The price of edible oil increased by 5.9% in March alone, while the price of flour and bakery increased by 4%-5% in the month as well.

The central bank should continue to intervene in the following meetings to curb rising inflation, commented Cristian Popa, a member of the BNR Board, adding that "prices have exceeded our darkest expectations."

Food prices increased by 11.2% YoY as of March, non-food prices by 10.9% YoY, and services' prices by 6.5% YoY.

iulian@romania-insider.com

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