Romania’s Annual Inflation Seen At 5.1%-5.3% In Aug – Analysts

The analysts polled by Mediafax estimated the annual inflation will resume an upward trend as of August, after five consecutive months of deceleration, due to an unfavorable base effect.

According to Lucian Anghel, chief economist at Banca Comerciala Romana, the annual inflation was at 5.2% in August, while prices were stable compared with July. He explained the widening of the annual inflation on an unfavorable base effect, as in August 2008 the prices fell compared with the previous month.

Laurian Lungu, managing partner with Macroanalitica, said Romania’s CPI might see a second negative monthly reading in August, after it fell 7 basis points in July.

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Since the end of the communist era in December 1989, Romania posted deflation in only three months.

However, several analysts believe the prices rose slightly in August and the annual inflation accelerated to 5.3%.

„Nothing special happened in August. The exchange rate (of the Romanian leu – e.n.) was rather stable and the increase is the result of an unfavorable base effect. We expect food prices to see further deflation. Other countries have recorded a general deflation due to the high impact of food prices,” said Nicolae Chidesciuc, senior economist at ING Bank Romania.

Romanian central bank targets an annual inflation of 3.5% for this year, plus/minus one percentage point. Early August, the bank revised its forecast on the annual inflation rate to 4.3% end December, from 4.4% previously seen.