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BNR: the present short-term projection reconfirms the perspective of slight acceleration of inflation in the next months


The present short term projection reconfirms the perspective of the slight acceleration of inflation in the next months shows the document of the monetary policy meeting of the Board of BNR of 5 April 2017.

‘In the discussions regarding the future evolutions, the members of the Board noticed that the present short term projection reconfirms the perspective of the slight acceleration of inflation in the months to come. It is also reconfirmed the anticipated annual rate of inflation which was kept under the  low limit of the target of June 2017, at a level only marginally superior to the previously estimated, reflecting the revision of the probable dynamics of LFO prices, and opposedly, of the anticipated rhythm of growth of the fuels price’ the document says, published on Wednesday.

On the other hand, the representatives of the BNR leadership consider that the immediate perspective of inflation is compatible to the estimated advance of the annual rate of inflation, shown by the most recent prognosis on medium term of BNR, published in the report on inflation of February 2017.

‘This advance gets in the interior of the variation interval of the target in QIV 2017 – placing at 1.7% in December – so that in 2018 to get to the superior half of the interval and get to the high limit, as the effects one-off of the reductions/eliminations of indirect taxes, excises, and non-fiscal taxes and intensification of the inflationist pressures, of the aggregated demand and salary unitary costs’ the BNR document shows.

According to the document, the members of the Board referred in the first interventions to the recent evolution of inflation. It was shown that the annual rate got in the positive trend in January 2017 and increased in February at 0.2% marginally over the estimated level. Besides the basic effect associated with the reduction of the standard quota of VAT at 20%, the evolution reflected the impact of coming back in advance of the annual dynamics of LFO prices at positive values, due tothe unfavourable climatic conditions which were present in Europe at the beginning of the year. Opposing influences, but of inferior dimensions,  had reductions of the VAT standard quota at 19% and the elimination of the super-excise for fuel, starting with January 2017, as well as the elimination of the non-fiscal taxes in February, affecting the dynamics of managed prices.