Romania Ctrl Bank Ups 2010 Inflation Forecast To 3.7%

The central bank also raised slightly the forecast for 2011 inflation to 2.8%, from 2.7%.

However, the bank kept its inflation target for 2010 at 3.5% with a one-percentage point variation band around the target, Isarescu told a news conference.

He said the annual inflation will stay around 4.2% until the end of the summer, and a rapid disinflation period will follow afterwards, on a favorable base effect.

In the autumn of 2009, the consumer prices rose considerably, fueled by increases in the excise duties for tobacco products and fuels.

„Until next spring, we will have a sharper disinflation and then a stabilization,” Isarescu also said.

The governor said, however, the central bank’s forecast is clouded by uncertainties, so that the 2011 inflation could set at any level between 1% and 5%.