The National Bank of Romania (BNR) revised its year-end inflation forecast upwards to 4.9 percent from 4.7 percent previously, and anticipates that it will reach 3.5 percent at the end of 2025, according to data presented on Wednesday by BNR governor Mugur Isarescu.

„We have a downward trajectory of inflation, a little less pronounced in the February projection. So inflation is going down gradually, not abruptly, and somewhere in late 2025 or early 2026 it will enter the target band. It’s a little slower than we forecast previously and this reduction in headline inflation is mainly driven by the core inflation component, the adjusted CORE2, which is good. It shows that the monetary policy is working. We’re not keeping it too tight, but we neither let it too loose to prevent inflationary flare-ups. We are trying that combination to bring inflation down without creating recession,” Mugur Isarescu said.

According to the central bank governor, the fact that the 2.5% plus/minus one percentage point target band will be reached a little later is important but also depends on the future decisions of the national bank regarding „when and by how much it will reduce the monetary policy rate.”

AGERPRES