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ING Bank: Romania's inflation rate at 5 pct, economic growth 0.6 pct this year
Romania's inflation rate will be 5 pct this year and 4.5 pct in 2012, meaning that it stays rather high, said ING Bank Romania chief economist Nicolae Chidesciuc. According to the cited expert, the bank expects Romania's economy to grow 0.6 percent in 2011 and 3.5 percent in 2012, respectively. 'This year, all sectors of the economy will witness growth, less constructions, which will be in the negative. The rest will all go upwards. Even agriculture will see a slight increase,' said Chidesciuc. According to him, 'lending will further stay feeble, flatlined at 5 percent.' ING Bank Romania recorded in 2010 a gross profit of RON 128 million (1 euro trades for RON 4.20), up 52 percent from 2009 as a result of lower costs with risk provisions.
BNR expecting inflation to fall below 4pct at end-2011
The National Bank of Romania (BNR) is expecting inflation in Romania to fall below 4 percent at the end of 2011, from 7 percent in January, BNR Governor Mugur Isarescu told a Gulf Co-operation Council - Romania business forum on business opportunities in Central and South-Eastern Europe held in Bucharest by Forum Invest.
'In Romania, there is a structural component of inflation that makes it hard to drop. The Romanian economy is now open and tends to take over unfavourable things from outside and make them domestic. When it comes to favourable things, there is inertia. Inflation doubled in the second half of 2010, to 8 percent, but more than half of this inflation was fiscal in nature as a result of an increase in the excise duties and the Value-Added Tax. I cannot say that BNR is optimistic, because inflation is an insidious illness, but we have to keep it in check. In January it dropped from 8 percent to 7 percent, it should stay at 7-7.5 percent throughout this summer, and fall to 4 percent in August-September and, hopefully stay at 4 percent et the end of the year,' said Isarescu.
He mentioned that for the time being there are two unknowns: the rise in food prices, which he said will be a reflection in Romania of what is happening in the world, although with its major farm potential Romania should have been sparred, and the developments in the oil prices. BNR is expecting oil prices to fall bellow $100 per barrel, to maybe $80, and a correction in the fuel prices in Romania.