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Inflation was 4.3-4.5% in November after rising tobacco prices

The annual inflation rate was 4.3-4.5% in November, on the background of pressures from tobacco prices. BNR could get within the interval of the inflation target at the end of the year, the main risk being the evolution of the exchange rate, analysts say.

."Tobacco prices laid pressure on inflation and increased in the anticipation of higher excises as of January 1, 2010. BNR pointed out this risk in the inflation report and such risks still exist in December", the senior economist of Raiffeisen Bank Ionut Dumitru said.

He expects a monthly inflation rate of 0.5% which rises annual inflation rate to 4.5% in November. However, Dumitru says the central bank will reach the inflation target at the end of the year, estimating a 4.4% inflation at the end of 2009, but the price evolution will be influenced by the political situation."Our prognosis is 4.35% after we changed the estimate before the election counting on an extended political instability. I tend to believe that, if the political crisis is solved quickly and we have a government by the end of the year and the election result is validated, the leu might be more appreciated", Dumitru added.

The senior economist of ING Bank Romania, Nicolae Alexandru Chidesciuc has a similar estimate for inflation in November - 4.5%, on the background of pressures from tobacco prices and season factors, as vegetable and fruit prices grow in this period."The central bank might reach the inflation target, but it depends on what will happen with the exchange rate. If the leu depreciates, the annual rate could climb to 4.7%" Chidesciuc said.He estimates that inflation will reach 4.55% at the end of 2009, slightly over the higher limit of the BNR target of 3.5% plus or minus 1%.

Melania Hancila, the head of the research department within Volksbank Romania considers that November inflation will be 4.3% son the background of a monthly rate of 0.3%."I think pressures came from non-food products and services. For the rest there was no other obvious factor, when the price of fuel did not grow and the leu did not depreciate too much," Hancila said.She considers that BNR will be within the interval of the inflation target, estimating an annual inflation rate of 4.4% for December.

"Having in view the evolution of the exchange rate and the very low consumption, there are high chances for the central bank to reach its target. Even if the leu depreciates there is still place for an annual inflation in the established target," Hancila mentioned.The national currency depreciated in October by 0.08% compared to the previous month, the average rate climbing to 4.2881 lei/euro from 4.2848 lei/euro in October, according to central bank data.In October the annual inflation rate dropped to 4.3% when consumer prices grew by 0.44% against September especially for services and non food products.

Sursa: http://www.actmedia.eu

Tags: inflation target prices annual tobacco november euro ing bnr

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