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Dec 10, 2009 14:43 EEST
BUCHAREST (Romania), December 10 (SeeNews) – Romania’s consumer price inflation most likely remained steady in November on stable domestic currency and shrinking demand, analysts said.
The median forecast of four local bank analysts polled by SeeNews earlier this week put Romania's November inflation at 0.4% month-on-month and at 4.4% in annual terms. In October, consumer prices rose by a monthly 0.44% and an annual 4.3%, within the central bank’s target variation band of 2.5% to 4.5% for this year.
Romania’s statistics board, INS, is expected to release November consumer price index (CPI) data on Friday.
“We see the inflation staying within the [central bank’s] target in November as well as in the following months as a result of the shrinking domestic demand, the relative stability of the exchange rate, the good agricultural production this summer and the lack of major hikes in energy prices,” Lucian Anghel, chief economist with Banca Comerciala Romana, told SeeNews.
The Romanian currency, the leu, remained almost flat at 4.2881 per euro last month from 4.2848 per euro in October, measured by the central bank’s average monthly exchange rate.
According to Rozalia Pal, macroeconomic and strategic analyst at UniCredit Tiriac Bank, last month “the disinflation pattern reaccelerated on the back of no significant change in fuel's price and stable currency.”
Romania’s central bank, BNR, has set its end-year inflation target for 2009 and 2010 at 3.5%, with one percentage point variation band on either side. In early November BNR raised its inflation forecast for 2009 to 4.5% from 4.3% and kept unchanged the projection for end-2010 at 2.6%. It also set its 2011 inflation target at 3.0%, with one percentage point variation band on either side.
Anghel said next year inflation will be influenced by Romania’s fiscal and wage policies and the extent of cuts in public sector wages in the context of the country’s 20 billion euro ($29.5 billion) loan deal with the International Monetary Fund (IMF), the European Union and the World Bank.
The two-year package focuses on Romania’s external and fiscal imbalances and on supporting its financial sector.
Romania’s end-2008 consumer price inflation slowed to 6.3%, way above the upper limit of the central bank’s 2.8%-4.8% target band for the year. End-2007 inflation was 6.6%.
The four analysts polled by SeeNews made the following projections for Romania’s inflation rate:
($ = 0.6786 euro)
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