“Rate hikes appear unlikely in a weak economy operating with a negative output gap. Tighter liquidity management via deposit-taking tenders could lift the effective rate above the current 5.50% deposit facility level, but this is not our base case and would more likely reflect FX concerns rather than renewed inflationary pressures”, according to the analysts.
They expect a sharp inflation deceleration over the summer months, driven by favorable base effects, while recent Brent developments suggest global fuel prices could provide additional short-term relief. Further RON depreciation remains an upside risk to the inflation outlook, although for now EUR/RON has stabilized in a new trading range.
„Core inflation reached 8.5% y/y in May, and we see it easing to 5.6% by year-end,” reads the report.
NBR expects a modest recovery in economic activity in Q2 2026, following stagnation in Q1. Higher year-on-year growth is expected to be supported by a relative improvement in retail sales, stronger construction activity, and a gradual stabilization of domestic demand, although developments remain uneven across sectors.
Regarding inflation, the central bank anticipates that headline inflation could ease slightly in June 2026 and reiterates that a substantial decline is expected in Q3, mainly due to the fading effects of previous electricity price liberalization and indirect tax increases. Despite this near-term disinflation outlook, NBR continues to view inflation risks as elevated and remains cautious amid ongoing geopolitical, energy market, and fiscal policy uncertainties.
(English version by Catalina Apostoiu)