Romania’s annual inflation rate at the end of 2013 is estimated at 1.5 percent year-on-year, after it stood at 1.8 percent in November last year, according to Raiffeisen Research’s recent economic overview of the country.

Also, the inflation rate is expected to reach a new historical low level in the first quarter of 2014, below 1 percent, due to “a favorable statistical base effect.”

“However, we expect the annual inflation rate to climb towards 3.0 - 3.5 percent year-on-year by Q4 2014 as the favorable statistical base effect would dissipate,” reads the report.

According to the report, the interbank interest rates (ROBOR) and RON yields are expected to increase gradually in 2014, after ROBOR decreased to very low levels in November-December.

Raiffeisen Research foresees a real GDP growth, excluding agriculture, of 2.4 percent this year.

“Real GDP excluding agriculture went up by 1.9 percent year-on-year in January-September, and the advance for the full year should have remained close to this level,” according to the report.

The researchers also expect Romania’s budget deficit to stay close to the Government’s target of 2.5 percent of GDP in 2013, while for this year, the budget deficit might remain below 3 percent of GDP.

The political noise, which increased further in December last year, is likely to remain high in 2014, given the elections for the European Parliament and for the presidential seat.

Irina Popescu, irina.popescu@romania-insider.com