“Average annual headline inflation is expected to stay negative through mid-2016, reflecting largely the VAT rate cut on food in June and the general VAT rate cut from January 2016 as well as lower commodity prices. Despite this, there is no immediate case for further monetary easing given the expansionary fiscal stance in 2016, the rapid growth in wages, broadly anchored inflation expectations, and lingering uncertainty in global financial markets,” IMF mission chief for Romania Andrea Schaechter said in a press release Thursday.
However, she added, continued low imported inflation could complicate future policy decisions.
An IMF mission visited Bucharest on October 13-21 to discuss Romania’s recent economic developments and the 2016 budget plan.