Romania central bank cuts inflation forecasts

Newsroom 04/08/2014 | 16:42

BNR announced on Monday it estimates that inflation will be 2.2 percent for the end of 2014, down from 3.3 and sets a 3 percent target for late 2015, down from 3.3. The institution also announced that the average inflation rate will be 1.4 percent this year and 2.4 percent next year.

“BNR’s board analysed the Quarterly Inflation Report in its meeting today. The document reveals the perspective of placing the average annual inflation rate at values sensibly lower than the ones estimated beforehand, under the central stationary target point for the middle of 2015 and above the variation interval in the second half of the prognosis horizon. According to the new projection, the annual inflation rate will be 2.2 percent by the end of 2014 and 3 percent by the end of 2015, and the annual average inflation rate we anticipate will be at 1.4 percent in 2014 and 2.4 percent in 2015” according to a press release from the bank.

BNR takes into account risks associated with this forecast. Recent events may influence a rise in investors’ aversion to risk in emergent economies. Recent geopolitical and regional tensions, as well as the restructuring process a number of European banking groups are going through, may impact the forecast in the future.

In the previous report, released in May, BNR changed the inflation prognosis from 3.5 percent to 3.3 percent for 2014 and from 3.2 percent to 3.3 percent for 2015.