Romania's National Bank (BNR) maintained the annual inflation forecast for the end of this year at 4.2% and increased only marginally, from 3.3% to 3.4%, the forecast for the end of 2020, under the quarterly Inflation Report issued on August 8.

The new estimates come against a backdrop of core inflation accelerating, economic activity intensifying, and prices being pushed up by excess demand, BNR governor Mugur Isarescu commented, according to News.ro.

The governor, who recently saw his term at the helm of the central bank renewed, pledged to keep inflation under control over the medium term, even if two electoral years follow. He warned, however, over the demand-side inflationary pressures that surfaced in the core inflation, which has recently accelerated.

"Prices are pushed up by excess demand, and there is pressure due to wage costs. (...) The economic activity has increased surprisingly. (...) There are tense conditions in the labor market," said the governor.

The lending dynamics is mixed, he also commented: while the lending to the households slowed down, amid recent macro-prudential measures [taken by the central bank], corporate lending maintained an upward trajectory.

editor@romania-insider.com

(Photo source: Bnr.ro)