Romanian PM Sees Inflation Exceeding 10% In ‘09

“Inflation might go over 10% again next year, it might see further increases, and this is not the only effect. We need to keep a close eye on the private sector, because of potential job losses (…). This is an estimation of the economic impact of the (wage) increase on employment level: 300,000 jobs will be lost in the private sector, because those in the private sector have nowhere to come with the money,” Tariceanu said on a television show on Realitatea TV.

 

In September, Romania’s annual inflation slowed to 7.3% from 8.02% in August and authorities expect it to be at around 6% at the end of the year.

 

Since the beginning of the year, inflation has picked up 4.61%.

 

The central bank expects inflation to reach 6.6% at the end of this year and 4.2% at the end of 2009, compared with a target of 2.8%-4.8% and 2.5%-4.5% for 2008 and the following year, respectively.

 

Romania, which has joined the European Union on January 1, 2007, plans to adopt the euro in 2014.

 

Under Maastricht criteria, inflation in the countries that want to adopt euro should not exceed by more than 1.5 percentage points the average inflation of the first three countries with the lowest inflation.

 

Also, the budget deficit should not exceed 3% of gross domestic product at the end of the year, and the public debt shouldn’t be higher than 60% of GDP.