Latest data show a significant contribution to the economic growth came from the industry and retail which rose over 10% in the fourth quarter of 2017, Unicredit said in a report.
Unicredit expects the central bank to operate three new increases in its benchmark interest rate, by 0.25 percentage points each, which would translate into a key rate of 3%.
The negative contribution in the sector of constructions reduced in the fourth quarter. However, the economic growth relied too much on private consumption, with investments being reduced by cuts in public investments and by fiscal uncertainty for the private sector.
Romanian consumer prices accelerated further in January, reaching an annual inflation rate of 4.3%, according to data from the country’s statistics board. Compared with December 2017, consumer prices grew 0.8% in January, the data also show. Romanians paid 0.64% more for food in January 2018 compared with December 2017, non-food items cost 1.08% more, and services cost 0.32% more.
Unicredit analysts expect an inflation rate of 4.9% in April. An increased inflation rate would force the central bank to proceed to new key rate increases.
The central bank currently forecasts inflation at 3.9% in the first quarter of 2018, 3.8% in the second quarter, 3.5% in the third quarter, and 3.2% in the fourth quarter. The central bank maintains its inflation target at 1.5%-3.5% for 2018.
Early February 2018, the central bank raised its benchmark interest rate by a quarter-point, to 2.25% a year, after a quarter-point increase in January.