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Sinca (BCR): 2% inflation at end of year; 1 % in January-February


BCR might review with a drop of 2% the prognosis about inflation at the end of the year, according to bank analyst Eugen Sinca.“This year agriculture allowed us to have a significant inflation drop in the summer months. We have already seen and inflation drop because of the VAT reduction fro bread, an administrative measure, and because of the good farm output. We think that at the end of the year we could have a 2% inflation. Maybe this will be our new prognosis for December, while in January-February we will probably reach a record of annual inflation which will drop to 1%,” said Eugen Sinca at a press conference.


He said the modernization of Romanian agriculture was important because Romania was making concrete progress toward the adoption of euro in 2020.


“We saw that BNR has already begun a relaxation cycle for monetary policy due to the reduced inflation, which means lower interest rates, lower financing costs for the state, therefore we have progress in achieving criteria and adopting euro. That is why we think that the reform of Romanian agriculture is very important for the adoption of euro in 2020,” Sinca declared.


According to the head analyst of BCR, we will have economic growth of 2.5% this year and agriculture will have a contribution of 1%. The economic growth estimate for 2014 is 2.3%, lower than in 2013, but with a better structure than this year.


BNR dripped to 3.1% the inflation prognosis for the end of the year. Previously the BNR prognosis for the end of the year was an inflation of 3.2%. The inflation target for the end of the year is 2.5% +/- 1%.