Prices in Romania, "unaffected by internal causes"

In Romania, there are no internal causes that lead to price increases, Central Bank governor Mugur Isǎrescu says.

Production and stocks are high, while demand is still reduced, so the only reasons for any increases would be pressure from outside, BNR governor considers.

However, Mugur Isǎrescu said that fuel price increase could occur, because there is an international trend to increase the cost of oil barrel.

Considering all this, the governor announced he believes that the disinflation process will soon be resumed, which, at the end of the year, could lead to an inflation rate of less than four percent.

Romanian National Bank increased its inflation forecast for this year, from 3.4 percent to 3.6 percent, and estimated for the end of 2012 an annual rate of 3.2 percent.

BNR Governor also presented the risks to slip from fulfilling inflationary expectations.

"These risks are likely adverse shocks caused by the supply side."

"It is sure that, on the external side, euro zone sovereign debt crisis and higher inflation in the euro area may reach a pick."

"Oil, food prices in international markets, the euro-dollar rate can mainly drive to inflation risks", Mugur Isǎrescu affirmed.

The Romanian National Bank Governor said the new agreements with the European Union and the International Monetary Fund (IMF) have been agreed, preventive type agreements, which will be completed in two years and will have a total of 5 billion Euros, 3.6 billion will come from the IMF and 1.4 billion Euros from the European Commission.


Translated by: Andreea Negrea
MA Student, MTTLC, Bucharest University.