Romania's central bank revises inflation forecast for end of 2024

Bucharest: The National Bank of Romania (BNR) has revised its inflation forecast for the end of 2024, lowering it from 4.9 per cent to 4 per cent, according to data presented by BNR governor Mugur Isarescu.

The central bank also anticipates that inflation will decrease further to 3.4 per cent by the end of 2025, Xinhua news agency reported.

The trend of declining inflation is expected to persist throughout most of the projection period, although the pace of disinflation is likely to slow down noticeably in the latter half.

This trajectory is influenced by various base effects, such as indirect tax hikes in January, adjustments in natural gas tariffs, and fluctuations in prices for vegetables, fruits and eggs.

Additionally, an increase in fuel excise duties in July is expected to have a favourable impact on inflation by July 2025. However, Isarescu noted that this forecast is contingent on future fiscal policies, which remain uncertain.

Isarescu also indicated that despite some fluctuations, the overall inflation trajectory is downward.

He mentioned that the July inflation rate, to be published next week, might still exceed 5 per cent, underscoring that monetary policy decisions should not be swayed by these short-term oscillations.