BUCHAREST (Romania), November 10 (SeeNews) – Romania’s consumer price inflation is expected to have accelerated month-on-month in October due to depreciation of the domestic currency, the leu, but is seen slowing down on an annual basis, analysts said.
Three local bank analysts polled by SeeNews earlier this week forecast a monthly inflation of between 0.4% and 0.5% for October, compared to a 0.39% inflation rate in the previous month. Annual inflation is seen at around 4.4%, versus 4.94% in September, thus falling 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 October consumer price index (CPI) data on Wednesday.
“In October we will probably witness an acceleration of the inflationary pressures mostly due to the depreciation of the local currency. This will materialise in higher services tariffs and imported items. Moreover, the advance in international oil quotations during the month leads to higher fuel prices,” Georgiana Constantinescu, research and publishing specialist at Credit Europe Bank, told SeeNews.
The Romanian currency, the leu, depreciated to 4.2848 per euro last month from 4.2389 per euro in September, measured by the central bank’s average monthly exchange rate.
Lucian Anghel, chief economist with Banca Comerciala Romana, said he sees the October monthly inflation speeding up on higher prices of vegetables, eggs, dairy products, fuel and utilities.
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. Last week 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.
Crisis-hit Romania struck a 20 billion euro ($29.9 billion) loan deal with the International Monetary Fund (IMF), the European Union and the World Bank in late March. The two-year package focuses on Romania’s external and fiscal imbalances and on supporting its financial sector.
Romania’s end-2008 consumer price inflation slowed to 6.3%, way above the upper limit of the central bank’s 2.8%-4.8% target band for the year. End-2007 inflation was 6.6%.
The three analysts polled by SeeNews made the following projections for Romania’s inflation rate:
|
Oct, m/m |
Oct, y/y |
End-2009 |
Lucian Anghel (Banca Comericala Romana) |
0.4%-0.6% |
4.3%-4.5% |
4.4%-4.6% |
Ionut Dumitru (Raiffeisen Bank) |
0.5% |
4.4% |
n.a. |
Georgiana Constantinescu (Credit Europe Bank) |
0.6% |
4.46% |
4.5% |
($ = 0.6676 euro)