In Romania, while it dropped to 5.9% in April annually, inflation remained at the highest rate in the region. Until the end of 2024, consumer inflation in Poland (4.6% annually in December), Czechia (3.7%), Hungary (4.8%) and Romania (4.7%) is expected to overshoot again central banks’ target ranges.
For 2025, prognoses point to a gradual retreat, with the exception of Romania, where this may last until early 2026.
As regards monetary policy, estimates related to a base scenario are that Romania’s central bank will most likely cut the rate with a total of 75 pp in the second half of 2024, to 6.25% at yearend.
“However, the fiscal gap pace is likely to derail our aforementioned estimates. Already facing an inflation hard to reduce in an electoral year when cutting the state’s recurrent expenditure does not seem to be a priority, the National Bank may have to delay the much-expected monetary policy easing decisions. The end-April 5.9% inflation is falling at a much slower pace than the previously anticipated one. A better agricultural year may aid in quelling inflation, but it will most likely not be able to offset two-digit increases in budgetary expenses, a reason why expectations also remain moderate,” states Mihai Chipirliu, CFA-Risk Director at Allianz Trade.
At regional level, Allianz Trade analysts forecast monetary policy will be moderate by end-2025.
(English version by Catalina Apostoiu)