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Mugur Isarescu: Annual inflation falls below 4% in September

Annual inflation in September, which will be announced next week, fell below 4 percent, within the target range of Romania's National Bank (BNR), according to Governor Mugur Isarescu. 'Inflation is back within the target range not by the end of this year, but next week (when the National Institute of Statistics is to release the figure - editor's note).

Inflation fell to slightly above three percent', said the Central Bank official on the occasion of Romania Financial Forum. BNR inflation target is 3 percent in 2011 and the target range is 2-4 percent (3 percent plus / minus one percentage point). But BNR last inflation forecast stood at 4.6 percent for 2011. In August, the annual inflation fell to 4.25 percent.

Romania was not ready to absorb European funds

Governor of National Bank of Romania Mugur Isarescu said on Wednesday, on the occasion of a financial forum, that he was mistaken in the past, namely when he believed that Romania was ready to absorb European funds, and it was not so.

'I believe that reforms in recent years and these agreements (with international financial institutions - editor's note) categorically led to an improvement of Romanian economy fundamentals. Maybe it's time to put an end to the big internal dispute. And I will be pulled by ears, in my turn, by the political leaders for this statement, but I believe that we must close this subject. The agreements were needed. Financial stability was secured. The economic downturn could have been alleviated, if European funds were better attracted. This is the solution, but I was burnt once, intensely, believing that the country was ready to absorb European funds, and it was not so. I made the same mistake in 2009 and in 2010 ', said Isarescu.

According to him, one of the improved fundamentals was the current account deficit. 'It was 14 percent. So, the economy grew by 7 percent, but with 14 percent external resources. How many times we have to say that they did not come, no one chased them out, but they did not come. They did not come, there were no capital outflows, but they did not come with 14 percent, because the world has changed. Because, here we are, the world entered the crisis, or whatever you want to call it. Such an adjustment, by definition, is extremely painful. There is no last minute lack of correlation, 7 percent in 2009 and the current account deficit reduction from 14 to 4 percent. What we have hoped for? That private capital will be withdrawn, but we will succeed to attract community money, to compensate for this difference. It was not so', said Isarescu.

According to him, the budget deficit was normal to explode, because it was created by capital inflows, in an overheated economy, with higher salaries, and a real estate close to a bubble.'/ We were / close to a housing bubble, we did not enter it, but we were on the brink of it. We have economic growth, with maintaining the current account deficit. Hungary has no current account deficit, nor Poland, but we still live with outside resources. This should be a warning signal, meaning that we still have a lot to do', Isarescu explained.

Sursa: http://www.actmedia.eu

Tags: percent deficit mugur inflation annual isarescu bnr

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