Inflation is expected to return to a downward path and reach 3% at the end of 2022.
Since the beginning of the year, there have been sharpening synchronized uptrends in many commodity prices and bottlenecks in production and supply chains, conducive to a step-up in inflation worldwide.
In Romania, a spike in electricity prices following market liberalization at the start of he year drove inflation above the central bank’s forecast and thus eliminated all chance of further key rate cuts from the current level of 1.25%.
Analysts expects the central bank to start raising the key rate.
The central bank board also showed concern about the growing current account deficit, driven by a wider trade balance deficit.
Several members were of the opinion that a major source of uncertainties also consisted in the absorption rate of the EU funds allocated to Romania via the Recovery and Resilience Facility, as well as of those under the new Multiannual Financial Framework 2021-2027.