BNR adviser: 5.6% year-end target inflation may need upward revision

The year-end inflation may exceed 5.6%, the latest projection of the monetary authority, according to Adrian Vasilescu, a communication adviser to the National Bank of Romania, quoted by News.ro.

A forecast inked before the energy price went out of control can not remain valid under current circumstances, explained Vasilescu - who stressed that his statements might not reflect those of the institution.

Next year’s inflation forecast of 3-4% is under threat as well, as the annual inflation will remain high at least by July - when the impact of the electricity and natural gas price hikes phase off, Vasilescu also said.

He mentioned that the electricity price (end-user terms) increased by 20% in January and 6% in July, while the natural gas price rose by 20% in July. However, while the hikes mentioned by Vasilescu are impressive - the real concern is generated by the fact that further price hikes are expected as the wholesale market prices (spot or long term) have not surfaced yet in the end-user prices, particularly when it comes to natural gas.

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