National Bank warns Romanian consumers of inflation but prepares for a much more positive future
The National Bank of Romania (BNR) declared that the recent ongoing inflation could cause a sharp deceleration in the country's economic growth in 2023. At the same time, however, the trend is expected to revive in 2024.
During the latest monetary policy meeting between the Board of Directors, BNR decided to keep the interest rate at 7%.
The consumers' confidence relies strongly on the increased interest rates on loans and deposits, the labor market development, and the ongoing Ukraine-Russia war.
The main determinant of the GDP advance will probably remain private consumption, but in the conditions of the strong deceleration of its growth in 2023, especially against the background of still high inflation and increased interest rates on loans and deposits of the population, as well as in the context of developments on the labor market and the uncertainty induced by the prolongation of the war in Ukraine, likely to affect consumer confidence, Ziarul Financiar reported.
At the same time, the number of employees in the labor market has slowly regenerated in the past few months, although it faced a bumpy December before returning to normalcy rate to catch up with pre-pandemic levels.
Earlier this year, the Romanian government imposed the new minimum gross monthly wage nationwide of RON 3,000, effective by January 1, 2023, to make up for the skyrocketing prices on almost everything.
It has been observed that the decrease in the annual inflation rate will be driven mainly by factors on the supply side, whose disinflationary impact is expected to increase progressively in the coming quarters, ZF also said.
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