AcasăEurope NewsAnnual inflation rate to decrease until end of current year on fluctuating...

Annual inflation rate to decrease until end of current year on fluctuating trajectory

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The annual inflation rate will decrease until the end of the current year on a fluctuating trajectory and higher than the one highlighted in the medium-term forecast from August 2024, according to the current evaluations of the National Bank of Romania (BNR).

The decrease will primarily be driven by base effects and the deceleration of import price growth, while this year’s unfavorable weather conditions and the increase in the quotations of some goods will continue to act in the opposite direction, mainly through the effects exerted on the dynamics of food and energy prices.

Great uncertainties and risks arise from the conduct of the fiscal and revenue policies, considering, on the one hand, the result of the budget execution in the first eight months of the year and the characteristics of the recent budget rectification, and, on the other hand, the fiscal-budgetary measures what could be implemented in the future in order to consolidate the budget, in the context of the medium-term structural fiscal plan assumed to be submitted to the European Commission in the autumn of this year.

Conditions on the labor market and wage dynamics in the economy also remain a source of uncertainties and risks. At the same time, significant uncertainties continue to be associated with the evolution of energy and food prices, as well as the future trajectory of the oil price, against the backdrop of geopolitical tensions.

The war in Ukraine and the conflict in the Middle East, as well as the economic developments in Europe and globally, in the context of the escalation of geopolitical tensions, generate increased uncertainties and risks regarding the perspective of economic activity, implicitly the medium-term evolution of inflation.

The BNR mentions that the monetary policy decisions of the ECB and the Fed are also relevant, as well as the attitude of the central banks in the region.

AGERPRES

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