Bad news for everyone’s pockets
The annual inflation rate will record in the second quarter of this year a moderate increaseaccording to the evaluations of the National Bank of Romania (BNR).
« According to the current assessments, the annual inflation rate will remain fluctuating in the 1st 2025 semester, continuing to reduce in March, on a higher trajectory than the one highlighted in the medium -term forecast of February 2025, and to record a moderate increase in the quarterrelatively in line with the previous forecasts, under the impact of the unfavorable basic effects associated with the evolutions of energy and food prices from the same period of the previous year. Increased uncertainties and risks arise from the future evolution of energy and food prices, including in the context of the legislation in the field, but also from the commercial policy measures adopted by developed states, with potential impact on the quotations of the raw materials, as well as on the international prices of intermediate and final goods ”, according to a communication of the BNA, the BN CRUS,
According to the quoted source, high uncertainties are associated with the future conduct of fiscal policy and income, given, on the one hand, the presumed impact of the corrective fiscal-budgetary measures implemented or adopted so far, as well as the budget execution of the first two months of the year, and, on the other hand, the requirement of the budgetary consolidation in accordance with and with the excessive deficit procedure. A source of uncertainties and risks remain the conditions in the labor market and the rate of increased salaries in the economy.
Also, uncertainties and increased risks to the perspective of economic activity, implicitly of the medium -term evolution of inflation, come from the external environment, under the prolongation of the Ukraine war and the situation in the Middle East, but especially in the context of the commercial policy of the American administration and the measures adopted in response to other states, to affect the global economy, International.
At the same time, the absorption and use of European funds, mainly of those related to the Next Generation I program, is conditioned by the fulfillment of strict targets and jackets. However, they are essential for the realization of the necessary structural reforms, including the energy transition, but also for the counterbalance, at least partial, of the contracting effects of geopolitical conflicts and budgetary consolidation.
Relevant are the decisions of the monetary policy of the ECB and the Fed, as well as the attitude of the central banks in the region, the source underlined.
« The members of the Board of Directors of the BNR expressed their concern about the deterioration of the international economic environment. Based on the evaluations and data available at this time, as well as under the very high uncertainties, the Board of Directors of the NBR decided in today’s meeting, April 7, 2025, to maintain the rate of the interest rate. Interest for the lending facility (Lombard) at 7.50 percent per year and the interest rate at the deposit facility at 5.50 percent per year. a manner that contributes to a sustainable economic growth. The NBR carefully monitors the developments of the internal and international environment and is prepared to use the instruments available in order to achieve the fundamental objective regarding the stability of medium -term prices, under conditions of keeping the financial stability ”, states in the central bank statement.
