RSS
BNR's Isarescu: Regional crises, election year, main inflationary risks
Romania is located in a hotbed of possible economic crises, which has determined the National Bank of Romania (BNR) to rate the external environment as the greatest inflationary risk, BNR Governor Mugur Isarescu said Thursday.
'The highest inflationary risk to Romania as far as the inflation forecast is concerned is the external environment that promises to be highly volatile. We could not anticipate crisis in Turkey, and then there are two-three crises threatening to break out around Romania,' Isarescu told a news conference where BNR released its inflation report.
And yet, Isarescu admitted that Romania's position in a hotbed of potential crises does not automatically lead to negative effects for Romania.
'Interest rates in Romania, at nearly 3.5-per cent per annum, can be said to be handsome for investors, given the context,' said Isarescu, also pointing to the ongoing crisis in Ukraine.
Among the external risks, Isarescu also mentioned capital flows that depend also on the decisions of central banks in other countries, and the economic developments in the Eurozone.
Among internal risks, Isarescu mentioned the year being an election year when there is a risk of uncertainties arising in relation to structural reforms.
'Overall, the balance of risks points to developments of between 2 and 3 per cent in inflation, with a tendency toward slightly higher levels,' said Isarescu.
BNR has adjusted its 2014 inflation forecast from 3 per cent to 3.5 per cent.