Romanian Central Bank keeps inflation target at 3.2% despite planned public wage increase

Romania's Central Bank has maintained its forecast at a 3.2 percent inflation rate this year and does not expect public sector wage increases to have a big impact on inflation, according to the BNR governor Mugur Isarescu. According to him, the salary increase will have a 0.2 to 0.3 percent impact on the inflation.

“Pay attention to how this number is interpreted. I don't think there's any reason to make it a headline, because these factors will be counterbalanced by the evolutions or implications of other factors influencing inflation,” said the BNR governor. The annual inflation rate was below the 3 percent target in the first quarter of the year, according to BNR. The International Monetary Fund (IMF) recently agreed to Romania’s planned increase of public wages this year, after two days of negotiations with the designated Finance Minister Florin Georgescu and other ministers of the new cabinet. The new cabinet led by Victor Ponta will lift public wages by 8 percent in June and the rest to 15 percent, sometime in October or November. In March the inflation rate was down to 2.4 percent, a historic low. editor@romania-insider.com