Romanian drought pushes up inflation, could affect 2012 GDP

A new Romanian government report suggests that inflation in the country could reach 5 percent by the end of the year, due to this summer's drought. The average inflation rate for the year would as a result reach 3.4 percent, according to figures from Romania statistics institute (INS). The figure would be higher than Romania's 3 percent inflation target for 2012 and the 3.2 percent previously forecast by the country's Central Bank (BNR).

The latest data from the INS released yesterday (October 9 ) shows that prices jumped by 1.18 percent in September, due to the rising food prices already recorded in the wake of the drought. The final impact of the drought on 2012 GDP growth in Romania remains unclear, according to the local media, but worse than expected eurozone economic results could also have an affect on the local economy. Between the drought, the eurozone and other macroeconomic factors, it appears difficult to make predictions with confidence for 2012. editor@romania-insider.com photo source: sxc.hu