Romanian inflation falls in Aug


Romania’s annual inflation fell to 8% in August from July’s three-year peak of 9%, pushed down by lower services and fuel costs and was marginally below market expectations, data showed on Wednesday.

Analysts said the sharp fall in August, before the main impact of lower food prices could be seen in coming months, signaled inflation would continue to decline, putting pressure on the central bank to halt raising interest rates. “We see the effects of good crops for fruits and some vegetables, but towards the end of the year we will also see the effects of strong cereal output,” said Rozalia Pal, head of macroeconomic research at UniCredit Tiriac Bank in Bucharest. “Inflation is on its way to hitting 6 or 6.5% at the end of the year. This is in line with central bank’s forecast and it may suggest the central bank is going to hold fire this month.”

Prices fell 0.1% on the month in August, with food costs rising slightly 0.2% after they fell 0.7% in July. Non-food items were flat, while services fell 0.9% in August, the Statistics Board said.

Analysts polled by Reuters earlier this month had produced a mid-range headline inflation forecast of 8.2% and a month-on-month figure of 0.1%. Inflation caught fire in Romania this year, rebounding from post-communist lows of 3.7% set in 2007 as soaring global food and energy prices added to pressures stemming from strong domestic demand. But with statistical base effects working in its favor, and a strong harvest this year, annual price growth could decline to as little as 6% by December, analysts say.

The central bank’s official forecast for end-year inflation is 6.6%, still above the target range of 2.8-4.8%. This could mean the bank will halt its tightening cycle, with rates remaining at 10.25%, analysts said. However, some still see pressure for higher borrowing costs stemming from loose fiscal policy later this year. “We might still see a rebound in inflation in coming months because of wage and pension hikes and uncertainties about global food and fuel prices, so I expect the central bank to remain hawkish,” said Elisabeth Gruie, currency strategist at BNP Paribas in London.

Elsewhere in the region, Czech inflation eased to 6.5% in August, the lowest level since December last year and Poland’s central bank head said price growth peaked last month. (Reuters)
Zwack Profit Falls 16% Figures

Zwack Profit Falls 16%

EC Advances Infringement Procedure Over Hungary's Sovereignt... EU

EC Advances Infringement Procedure Over Hungary's Sovereignt...

Hell Energy Inaugurates HUF 80 bln Capacity Expansion Manufacturing

Hell Energy Inaugurates HUF 80 bln Capacity Expansion

Puskás Arena to Host 2026 Champions League Final In Budapest

Puskás Arena to Host 2026 Champions League Final


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.