Stiri	Stiri afaceri	Stiri companii	Evenimente de afaceri

National Bank revises inflation forecast downward

Economic growth is expected to resume in 2010, amid budget deficit adjustment, rise in productivity and a balanced budgetary structure, central bank Governor Mugur Isarescu said yesterday.

The National Bank of Romania (BNR) revised down the inflation forecast for 2009 and 2010 from 4.4 per cent to 4.3 per cent, and from 2.8 per cent to 2.6 per cent respectively, the governor of the central bank, Mugur Isarescu as saying yesterday.

‘We don't have major changes over the late year's projections. For December 2010, we are a bit more optimistic, as instead of 2.8 per cent, we see it rather as 2.6 per cent given the current data,' Isarescu told a press conference where he laid out the inflation report, saying there are ‘potential' reasons for the projections to be different from the original.

According to the BNR governor, evolution of the global economic crisis is the key uncertainty factor. Economic growth is expected to resume in 2010, on the basis of an adjustment in the foreign deficit, rising output and a balanced budgetary configuration.

Inflation rose 0.2 per cent in June, compared to May, amid rising prices for non-foodstuffs and services, and a slight reduction in foodstuff prices, while the yearly inflation rate declined from 5.95 per cent in May to 5.86 per cent in June.

The inflation target was set at 4.5 per cent +/-1 per cent. June and September performance criteria were set at 6.4 per cent and 5.7 per cent respectively, and the annual rate of inflation should stay within +/- 1 per cent of the target. For 2009, BNR set an inflation target of 3.5 per cent, +/-1 per cent.

Budgetary spending showed that salaries and goods were the only elements on the rise in the first quarter, Isarescu said yesterday, outlining the need for a much more serious ‘debate' on their structure. The good news is the gap narrowed between salaries and productivity, the first such trend reversal in four years, the governor also said.

The budgetary deficit stood at RON 14.38 bln, or 2.75 per cent of the estimated Gross Domestic Product (GDP), and slightly under the first-half 2.73 GDP ceiling agreed with the International Monetary Fund (IMF). During January through May, the consolidated general budget registered a deficit of 2.2 per cent GDP, up 0.4 GDP from late April.

On the other hand, the current account deficit and short-term foreign debt saw noticeable improvement, which led to the currency exchange rate growing stable, the central bank governor said. ‘There is an obvious improvement in the economic fundamentals that led to Romania's rating being downgraded and to pressures on the exchange rate. Some, have pity on them, are still waiting for the rate to reach RON 4.7/EUR,' Isarescu told the conference, adding that the current account deficit is covered by foreign investments in proportion of 100-plus per cent, which led to a foreign currency surplus. He specified that Romania's chief excess regards the current account deficit, which is likely to go down this year. Consumption waned substantially in the second quarter, against a backdrop of economic contraction which made consumers have second thoughts about buying durable goods, as a result of lower disposable income and economic crisis. At the same time, new deposits doubled during the first five months,' Isarescu also said. Separately, the second tranche of the IMF loan can go straight to the budget, yet this requires legislative changes and talks with IMF. Nonetheless, the amounts will eventually end up in the BNR reserves,' the central bank governor said.

Disinflation leads to lower interests on loans and savings deposits

Disinflation, which is to continue into early 2010, will cause interest on loans and savings deposits to drop, the chief economist with the Romanian Commercial Bank (BCR) Lucian Anghel said, while attending the presentation of the quarterly inflation report, Agerpres reports. ‘The disinflation process will carry on and this will encourage interests on loan and deposits to fall if we also take into account the decline in disposable income. These interest rates will be positive really, and I think we might also expect a drop in monetary policy interest,' Lucian Anghel said, who emphasised his expectations of a steady exchange rate for the second half of the year, in line with the message by BNR Governor Mugur Isarescu.

Separately, Romania is the only country in the region that asked the IMF for sums as part of the loan agreement on covering the budgetary deficit, BNR Vice-governor Cristian Popa said at the presentation of the inflation report. He also said that bad loans will grow in the second half at a pace higher than it has done so far.

Sursa: http://www.nineoclock.ro

Tags: bnr lsquo which second inflation isarescu economic governor deficit budgetary bcr

Articole similare