Romania, National Bank: The rise in energy prices to be seen in July inflation

The latest inflation forecasts, to be formally released this Tuesday, have been revised upwards – largely driven by higher energy prices, as National Bank of Romania (BNR) Governor Mugur Isarescu announced.

BNR sees the inflation increasing from 1.6 percent at the end of this year to 3.1 percent in 2018, driven by strong domestic demand.

“Price developments in Romania are under control for now, inflation is one of Europe’s lowest, but it is just as true that this period of negative inflation is ending,” Isarescu stated at end last week.

In its meeting in August 4, the BNR Board examined and approved the August 2017 Inflation Report.

“The new scenario of the projection reconfirms the prospects for a speed-up in inflation throughout the forecast interval. Compared to the previous Report, the rising path of the projected annual inflation rate was revised upwards over the entire forecast period, particularly in the short term, remaining, however, within the variation band of the target.

The uncertainties and risks associated with this outlook stem from the domestic and external environment. Domestically, they are compounded by the fiscal and income policy stance, also ahead of the envisaged budget revision,” a press release of the central bank reads.

According to Isarescu, the financial institution he is running for so many years, was paying more attention to actions taken by regional and European central banks than in the past.

Moreover, BNR’s head said on Friday he is concerned about the rising energy price on the stock exchange, after it was traded on OPCOM’s spot market (Next Day Market) and increased two or three times on Thursday, as the evolution of administered prices has become the highest uncertainty.

Energy price with delivery on Friday reached RON 570/ MWh.

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