Romania Annual Inflation Seen Easing To 4.1% In March

Monthly consumer prices are estimated to rise by 0.1%-0.3% in March.

„The inflation bottomed out in January. It will rise again in April, but afterward inflation is expected to slow down, unless we will witness a change in the regulated prices,” said Lucian Anghel, chief economist at lender Banca Comerciala Romana (BCR).

In January, Romanian CPI rose by an unexpected 1.68% on the month, mainly due to a 14% increase in tobacco and cigarette prices, while the annual inflation widened to 5.2%.

„The biggest risks are posed by administered prices. The gas producers demand price increases of 17% to 18%, which is a huge level that could have a strong impact,” said Ionut Dumitru, chief economist at Raiffeisen Bank Romania.

Dumitru said the inflation could spike again in the third quarter of the year, due to higher regulated prices and rising food prices. He said food prices are not likely to remain stable in the third quarter as they did in the year-earlier period.

The analysts widely expect the central bank to reach its inflation target for 2010 of 3.5%, plus/minus one percentage point.

Romania’s statistics institute is due to release March inflation data on April 12.