The consumer prices will increase by a combined 9.2% in 2021-2022, 2pp more than previously estimated, according to the revised inflation forecast published by the National Bank of Romania (BNR) on August 9, according to Romania-Insider.com.
The bulk of the revision was operated for the first part of the period when the annual inflation is expected to hit 5.6% as of December compared to 4.1% under the previous projection drafted in May.
In 2022, the annual inflation is seen as easing to 3.4%, a more moderate 0.4pp upward revision compared to May 2021 forecast.
Inflation already hit 5% in June, BNR governor Mugur Isarescu hinted (data will be released this week), blaming the energy prices and adding that all the central bank can do is prevent the second-round effects, meaning the pass-through of energy prices into the regulated prices.
“You can’t fight the energy prices with interest rates,” governor Isarescu stated, quoted by Profit.ro.
The day before, BNR maintained the refinancing rate at 1.25% – the lowest level ever, citing “elevated uncertainty” mainly related to fiscal policy.
The latest data published by the National Institute of Statistics (INS) indicates annual inflation of 3.94% in June, compared to 3.75% in May.
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