Romania's FinMin more cautious than central bank on inflation

Romania's Social Democrat (PSD) minister of finance, Adrian Caciu, expressed more caution than the National Bank of Romania (BNR) regarding inflation's trajectory, seen as reaching 9% YoY possibly 8% YoY at the end of the year, compared to central bank's 7% YoY projection.

For some reasons insufficiently explained, minister Caciu implied some causality relation between domestic demand, imports and inflation.

"Regarding inflation, I am cautious about saying that we will have single-digit inflation at the end of the year. Some say that [single-digit inflation might be reached] from the middle of the year, but I want to be more cautious in this situation. I could say even below 9%, about 8% [at the end of the year]," minister Caciu said, according to Bursa.ro.

In fact, the high inflation last year only helped the Government sweeten some key ratios such as debt-to-GDP or the public deficit measured by comparison to the GDP. Higher than planned inflation this year would help it again achieve fiscal consolidation without genuine efforts directed towards key topics such as the VAT gap, tax evasion or better allocation of public funds.

(Photo source: Inquam Photos/Octav Ganea)