“The reading was a positive surprise relative to both the Bloomberg consensus median of 6.6% and our forecast of 6.8%. Our forecast error was driven mainly by non-core components, particularly energy and fruit and vegetable prices. The significant decline in annual inflation was also supported by a favorable base effect, as the impact of the indirect tax increase implemented in August last year dropped out of the comparison base,” reads Erste Group report.
Romania statistics office INS on Friday announced a 6.2% annual inflation rate, down from 8.2% in July.
At the same time, Erste analysts are cautioning the balance of risks remains tilted to the upside. Global oil prices remain inflationary, while the severe drought and conditions in the electricity market are likely to be reflected in future CPI readings.
„We continue to expect inflation to stay above the NBR target band in 2027 and forecast annual inflation at 4.3% at end-2027”.
Additionally, the analysts expect the BNR to keep its key rate unchanged at 6.50% until the May 2027 Inflation Report.
(English version by Catalina Apostoiu)