BNR indicates an inflation rate fall to 2.7 pct in 2011
Date: 08-02-2010
Romania's National Bank (BNR) indicates the inflation rate will fall to 2.7 percent in 2011 from 3.5 percent in 2010, stated on Friday Governor of Central Bank Mugur Isarescu, when presenting the Quarterly inflation report. 'Inflation could fall to 2.7 percent in 2011, from 3.5 percent in 2010', said Isarescu. The inflation variation band in 2009 was outstripped by 0.2 percent, governor of the National Bank said . 'The variation band was outstripped by 0.2 percent in 2009', he said.The central bank head also announced that the consumer price index had picked up in the last two months of 2009. Great danger in upcoming period is appearance of a well-being, euphoria feeling
We view as a great danger in the next period the appearance of a state of well-being, of euphoria, stated on Friday Central Bank Governor Mugur Isarescu. 'The economic uncertainty remains high enough even now. Forecasts are not optimistic, we do not want to send an optimistic message, just one of a higher confidence. And we are far from sending euphoric messages. On the contrary, we believe that a substantial burden in the coming period is the appearance of a well-being, euphoric felling', he said .
According to him, there are 'more than encouraging' positive trends in the evolution of the monetary cost of labor in industry, therefore mainly in the private sector.'Here, adjustments were pretty severe and I think they will help the Romanian economy not only as regards inflation. They will also help competitiveness, a healthy economic growth and the increase of the standard of living on solid basis', stressed the Governor of the Central Bank, quoted by Agerpres.
National currency appreciation will not bring lower prices
The sole means to keep inflation down is to let the prices float free, stressed on Friday Governor of Romania's National Bank (BNR) Mugur Isarescu. 'A reduced volatility of the rate helps in this case. The national currency appreciation will not bring lower prices, but at the most will keep them at a certain level. But depreciation represents a signal for higher prices', said Isarescu.
Lending does not create inflationary pressures
Romanian National Bank (BNR) Governor Mugur Isarescu said on Friday that the resumption of lending in Romania will not have a significant impact on the inflation evolution. 'We do not believe that the lending activity could create pressures. The banks are still quite reluctant. Sooner or later, lending will be differentially resumed, depending on the bank, but it will not have a major impact upon the inflation', Isarescu explained, during the presentation of the Quarterly Report on inflation.
He warned that, with respect to the fiscal policy, there is the risk of an upward deviation from the inflation level, 'at least because of the endless discussions regarding the imaginary anti-downturn programmes'.
Budget deficit agreed with IMF, main cause for inflation rate deviation
The preservation of the 2009 budget deficit within the limits set in the agreement concluded with the International Monetary Fund, the European Commission and the World Bank will be a potential cause for the inflation rate deviation, Governor of the National Bank of Romania Mugur Isarescu said on Friday.
'The potential underlying causes for the deviation of the inflation rate from the set course are the preservation of the 2009 budget deficit within the limits set in the agreement sealed with the IMF, the European Commission and the World Bank, and the reactive character of the agreement sealed with Romania,' Isarescu said.Moreover, the BNR governor pointed out the negative deviation of the GDP will be influenced by the low competition pressures on the markets of the production factors, the slumping selling prices and foreign investors' decreasing aversion to risk.
