Romanian central bank official says electricity price might have pushed up inflation in Jan

The headline inflation might exceed the 2.1-2.5% interval estimated by Romania's National Bank (BNR) in January because of the electricity prices, said BNR board member Csaba Balint, Economica.netreported.

Starting January 1, the residential electricity consumers will pay by default prices 17-24% higher than those paid before January 1 until they sign a new contract with a supplier on the free market.

The market regulator recommended the incumbent suppliers to compensate the customers who stay with them after signing new contracts. But the market prices are still higher than the regulated prices paid before January 1; therefore, the market liberalization will impact the overall consumer price index.

Separately, Csaba Balint said that the BNR sticks with the forecast for 3% GDP growth this year (versus 4.3% used by the Government for the budget planning) that will be helped by lagged effects of the interest rate cuts last year and by the inflow of funds from the European Union.

The economic growth will be moderate in the first quarter of this year but will accelerate as both drivers will produce effects, Balint explained.

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