Romania’s February annual inflation rose to 8%, its highest level in almost two years, boosted by hefty rises of natural gas tariffs and fuels, the National Statistics Board said on Tuesday.
Romania’s February annual inflation rose to 8%, its highest level in almost two years, boosted by hefty rises of natural gas tariffs and fuels, the National Statistics Board (INS) said on Tuesday. Price growth is expected to rise further, peaking at some 8.5%, according to analysts’ forecasts, and putting pressure on the central bank to raise borrowing costs. Analysts polled by Reuters earlier this month had produced a mid-range headline inflation forecast of 8.1% in February, compared with January’s inflation of 7.3%. “The figure is not surprising at all. The impact from gas price hikes is set to continue next month,” said Ionut Dumitru, head of research at Raiffeisen Bank in Bucharest. “This is fuelling inflationary pressures and may prompt the central bank to further raise rates by 50 basis points to 9.5%,” he said.
Romanian inflation surged in the second half of last year because of rising food prices and global turmoil on financial markets, which has weakened the lei currency. The central bank forecasts December inflation at 5.9%, well above this year’s 2.8-4.8% target range. It expects price growth to peak in March at 8.3%. Prices rose 0.7% on the month in February, with non-food prices recording the steepest rise at 1.1%. Food prices rose 0.4%, while services were 0.5% up.
The INS said the European Union harmonized index was up 5.5% on the year. The indicator of prices excluding administered prices grew by 0.4 on the month in February. At 0820 GMT, the lei traded firmer following the data release, at 3.7040 against Thursday’s close of 3.7263. (Reuters)