Romania Central Bank Ups Inflation Forecast To 5.1% In 2011, 3.6% In 2012

Isarescu said the inflation rate will re-enter the variation interval targeted by the central bank in the first quarter of 2012. The central bank targets an annual inflation of 3% at the end of the year, plus/minus one percentage point around the band.

However, the governor said the forecast for the end of 2011 doesn’t include a possible increase in thermal energy prices in the last part of the year.

Romania’s annual inflation rose to 8% in March, the highest figure since August 2008. The spike in inflation was due to higher food and oil prices on international markets, but also to a five-percentage point increase in the sales tax in July 2010.

Isarescu said the annual rate will continue to remain high in the second quarter, on a negative base effect.

The central bank expects the disinflation trend to resume in the second half of this year.