Annual inflation will remain outside the central bank’s target variation band of 1.5%-3.5% throughout the second half of 2019 due to unfavorable shocks in the first half and is then seen stabilizing around the upper band of the target.
Isarescu said inflation was impacted by legislative changes taxing telecom companies, a robust growth of the average net salary and growing excess aggregate demand.
For 2020, the inflation forecast is positive but wage growth and excess demand would have to be toned down, said Isarescu.
External factors are unfavorable amid the trade war between China and the United States, even though the international situation has not yet impacted Romania’s economy.
Isarescu emphasized that the Federal Reserve has eased its monetary policy, the European Central Bank and Bank of England are considering easing theirs, along with a series of central banks in emerging markets.