Romania's inflation rate should be within the 3.5 percent target by the end of this year, according to the country's central bank (BNR) governor Mugur Isarescu (in picture). BNR has kept its forecast at 3.5 percent, with increases in energy costs predicted to be balanced by slow price growth in the second half of the year.

On the presentation of the BNR inflation report today (November 7 ), the governor told reporters that he expected the the inflation rate in Romania to be above the 1.5 – 3.5 percent target rate in the first six months of the year, before slipping back in the latter part of 2013. Next year, a rate of 3.2 percent is predicted.

A combination of energy prices and the elevated food prices caused by the drought last summer drove in inflation up to nearly 5 percent in December 2012. This was a greater than expected rise and was above the 2 – 4 percent target for the end of 2012. The maximum inflation rate for 2012, 5.33 percent, was reached in September, when consumer prices went up by 1.18 percent.

editor@romania-insider.com