Romania’s central bank (BNR) decided on Tuesday to raise its 2021 inflation forecast to 3.4% from 2.5% predicted in November, close to the upper end of its target band of 1.5-3.5%, according to seenews.com.
„Since the release of the November 2020 Inflation Report, some significant inflationary pressures have materialised, induced mostly by exogenous components of the consumer basket, namely electricity prices and fuel prices,” the central bank said in its March inflation report.
BNR explains that on the domestic front, risks associated with the fiscal and income policy stance have become significantly less relevant given that the authorities have recently approved a budget plan outlining the start of a medium-term fiscal correction in 2021, from the high levels of last year’s government deficit, according to BNR.
The central bank expects that consumer prices will rise by 2.8% in 2022.
Romania’s consumer prices rose 3.16% year-on-year in February, compared to an increase of 2.99% in January, the latest data from the national statistical office, INS, showed.
On Monday, BNR decided to keep its monetary policy rate unchanged at 1.25%.