The country’s annual inflation rate has exceeded the 15% threshold over the last three months, reaching 15.3% in October 2022.
It also raised its inflation forecast for end-2023 to 11.2% from a previous projection of 7.5%.
Moreover, Isarescu sent a warning on Monday regarding energy prices. “It’s no joke,” noting that hikes in natural gas and electricity prices quickly create a ripple effect.
“(…) Energy prices are no joke, because they quickly trigger other price hikes, as they are the quasi-permanent component of almost all costs. If we look at recent months, inflation has hovered between 14% and 16%. Monthly increases have ranged between 1% and 1.3%, compared to the big increase in April, a plateau which we can see better if we redo the chart. Towards the settlement of consumer price index inflation, an important contribution was made by the stable evolution of the electricity and gas component and a disinflationary influence of the fuel group,” Isarescu also said.
According to the central bank, the annual CPI inflation rate is projected to follow a slightly upward trajectory until the end of 2023 and then to correct itself assuming the gradual dissipation of both supply shocks and aggregate demand pressures. In the base scenario, the downward trend will be temporarily interrupted in the third quarter of 2023, with the coming into force of the price ceiling measures for energy goods, with an impact on the annual CPI inflation rate for four quarters. Subsequently, at the end of the third quarter of 2024, the convergence towards the inflation target is expected to be rapid, with extremely favorable base effects as the main source.