The inflation rate is expected to reach between 1.8 and 3.4 percent in July, after VAT increase

Newsroom 10/08/2010 | 08:18

Banking financial analysts have significantly different expectations regarding the inflation rate to be reached in July, shows Mediafax. Estimations vary between 1.8 and 3.4 percent for the month in which the VAT was increased from 19 to 24 percent.

The National Bank of Romania forecasts an impact of 3 percent in price growth for the first three months after the VAT increase. The second round o price increases is expected to have a less prominent impact, measured in a price growth of 1 percent, as estimated by the NBR. All the questioned financial analysts expect an inflation varying between 6.3 percent and 8 percent on the last twelve months, but all agree that the July inflation will be decisive for this year’s final results.

The most optimistic prognosis belongs to BRD GSG chief economist, Florian Libocor, who expects a monthly rate of 1.8 percent, translated into a 12 month inflation of 6.3 percent. On the other hand, the most pessimistic estimation is of an annual inflation rate of 8 percent and a monthly rate of 3.4 percent, and belongs to Lucian Anghel, BCR chief economist.