“Inflation is on a downward trend and we expect it to continue, owing to a good agricultural year. Still, it’s likely the rate will remain above the central bank’s target of 5% for December this year,” IMF mission chief Jeffrey Franks told a news conference in Bucharest.
Romanian consumer prices fell 0.29% in June from a month earlier, pushed down by cheaper food items, while the annual inflation eased to an unexpected 7.93%, from a 33-month high of 8.41% in May.
The central bank targets an annual inflation of 3% at the end of 2011, plus/minus one percentage point around the band. The bank has revised upward its forecast on the year-end inflation to 5.1% from 3.6%, citing upside pressure from surging global prices for energy and food items.
The IMF cut its forecast on Romania’s economic growth to 3.7% in 2012, from 3.9% previously, while keeping this year’s growth estimate unchanged at 1.5%.
Joint teams from the IMF and the World Bank visited Romania for the second review of a EUR5 billion precautionary loan arrangement.
The eastern European country has met all its targets for the first half of 2011, with the exception of the general government arrears, Franks said at the mission wrap-up.