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BNR's Vasilescu says January's inflation rise caused by State's ill-timed pushing up regulated prices
The 4.3 percent inflation rate this January announced by the National Institute of Statistics is mainly the effect of the increase in regulated prices, specifically for fuel, electricity, heating and gas, National Bank of Romania (BNR) strategy consultant Adrian Vasilescu said on Thursday, pointing out that the State has moved these prices up when it wasn't supposed to.
According to Vasilescu, a look at the inflation table released by the statistics authority shows that fruit or lentil prices have risen indeed, but these could not have had a significant impact in a table with thousands of item prices synthesized in three columns: food, non-foods and services. "But all of a sudden the State remembered being the manager of extremely important regulated prices or tariffs that weigh substantially in the table of consumer prices, specifically fuel, electricity, heat, gas. It's these four boxes which the State has moved with one strike with hikes well above the inflation rate that have triggered this grim soar to 4.3 percent. (...) So we see the State has introduced hikes in the inflation table that have changed the average," Vasilescu said.
He defended the National Bank, saying that despite the instruments at hand, it couldn't have done anything against regulated prices, but that attempting to sap the institution's credibility is the easier way to go.
The annual inflation rate climbed to 4.3 percent in January 2018 from 3.3 percent in December 2017, on the background of foods growing 3.79 percent more expensive and prices for non-foods advancing 6.23 percent compared to January 2017, according to data released by the National Institute of Statistics on Wednesday.
Service prices were up 0.9 percent from January 2017. The National Bank of Romania revised its year-end inflation forecast for 2018 to 3.5 percent from an initial 3.2 percent.