Romania’s negative demand gap narrows – c-bank inflation report

By bne IntelliNews May 9, 2014

Demand in Romania remains subdued but the demand gap is narrowing, according to the latest Quarterly Inflation Forecast issued by the central bank on May 8.

The economic activity is gaining ground and the negative output gap is narrowing. But in price stability terms, this means smaller impact on disinflation, the central bank report also notes. The negative output gap has been a major disinflation driver recently.

However, the central bank has cut again its end-2014 inflation forecast to 3.3% after previously raising it by 0.2pps amid the supplementary taxes and excise hikes enforced by the government earlier this year. The end-year inflation forecast for 2015 was also marginally adjusted - but upwards, by 0.1pps to the same level of 3.3%.

The negative output gap has been revised for the entire forecast interval to levels entailing relatively softer-than-previously-projected disinflationary pressures, due to the statistics office’s revision of GDP, the faster-than-anticipated economic growth in the final quarter of 2013 and the reassessment of the real broad monetary conditions, which are seen to be more growth-supportive during the reference period.

Related Articles

Romanian authorities approve takeover of 51% in KMGI by China's CEFC

The Romanian authorities have approved the transaction through which China Energy Company (CEFC) is taking over 51% of KazMunayGas International (KMGI), the majority shareholder in Romania’s ... more

Romanian telco RCS&RDS indicted in bribery and money laundering case

Romania’s National Anticorruption Directorate (DNA) has indicted Romanian telecom operator RCS&RDS for bribery and money laundering and seized two of its assets worth around €3mn, RCS&RDS ... more

Hungarian branch of Bucharest listed Digi to buy Invitel Tavkozlesi in €140mn deal

Bucharest listed Digi Communications announced on July 21 that its Hungarian subsidiary, Digi Tavkozlesi es Szolgaltato, has signed an agreement to acquire Hungarian broadband and telephone provider ... more