The analysts’ forecast is higher than the central bank’s inflation forecast for this year, kept at 3.2%; the wage raises in the public sector will have a marginal effect on it. Inflation had been reaching record lows in Romania since November 2011, stopping at 1.79% in May.
The inflation decline allowed the central bank (BNR) to operate four monetary policy rate cuts in a row to 5.25%. It stopped the monetary policy rate relaxation cycle in April, however, for fear of potential capital outflows and pressures on the leu.
Analysts expect prices to start rising again in the second half, which means a reversal of the disinflation trend, partly due to the lower agricultural output than in 2011, as well as to the adjustment of controlled prices and the increase in the oil quote on the international markets. Inflationary pressures will probably remain moderate, given an increase in the gross domestic product below the potential for growth of Romania’s economy.
BCR, the largest bank on the market, sees inflation at 3.7% by yearend. More pessimistic, ING Bank says June inflation will have gone up to about 2.6%, a little more than the central bank’s projection of 2.3% and may reach 4.5% at the end of 2012, much higher than BNR’s expectations, because of a surge in food prices. On the other hand, RBS sees inflation up at 3.5% at the end of the year.
The National Statistics Institute is expected to announce inflation data for June on Monday.
(English version by Loredana Fratila-Cristescu)