“Inflation is expected to accelerate to around 5% in December, because of the negative effects of the drought on food prices,” the report noted.
The central bank targets an annual inflation of 3%, plus or minus 1%.
Romania’s inflation unexpectedly jumped to 5.33% in September, from 3.88% a month earlier, with consumers paying by 2.3% more for food.
The prolonged dry weather may also affect the gross domestic product, the government said. Additionally, a slower-than-expected economic growth in the euro area would have negative effects on the local economy, according to the report.
Romanian GDP is seen expanding by some 1% to 607.3 billion lei (some EUR133 billion) in 2012, supported by a 0.7% increase in final consumption. Gross capital formation is expected to grow 6.4% year-on-year.
The government estimates the current account deficit will narrow to 4% of the gross domestic product in 2012, on lower capital inflows. Last year, the gap stood at 4.4% of GDP. (EUR1=RON4.5698)