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
EC clears €200mn capital increase at Romanian state-owned CEC Bank
The European Commission has approved Romania’s planned €200mn capital increase for state-owned CEC Bank, allowing the country to proceed with strengthening the lender’s financial position, ... more
Austrian bank Addiko to enter Romanian market with consumer loans first
Addiko Bank, an Austrian financial institution specialising in the consumer and SME sector operating in Central and South-Eastern Europe (CSE), is preparing to launch operations in Romania with the ... more
Moldova’s MAIB announces stronger profit and plans to expand in Romania
Moldova’s Maib bank, which plans to list its shares on the Bucharest Exchange (BVB), has reported an excellent third quarter, with net profit rising by 11% year on year to MDL1.1bn ... more