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Bloomberg: Annual inflation rate in June – 8.7 pc, the highest in 3 years

The annual inflation rate in Romania will very likely be calculated in June at the highest level in the past three years, given that last year’s drought pushed food prices up, and the global fuel prices surged, indicates a Bloomberg poll quoted by Rompres.

The annual inflation rate picked up to 8.7 per cent in June, from 8.5 per cent in May, according to estimates by 12 economists interviewed by Bloomberg. The National Statistics Institute is to make public today the annualised inflation rate for June. “The annual inflation rate will stay high both in June and in July. The inflation rate will probably start going down in August, and we expect favourable food price developments in the months to come,” says Ionut Dumitru, chief economist with Raiffeisen Bank Romania. Last year’s drought destroyed close to one-third of Romania’s agricultural yield, which triggered an increase in food prices. The inflation rate rose from 3.7 per cent in May 2007 to 8.6 per cent in April 2008, forcing the central bank to raise the key interest rate at every meeting, Bloomberg comments. At present, the monetary policy interest rate is 10 per cent, the highest in the European Union. The rise in natural gas and electricity prices, in cigarette excises and other products will drive the inflation rate up to 9.7 per cent in July, according to a June 7 estimate by BCR analysts. The agricultural yield will likely double this year as compared to last year, according to Government officials. The agriculture sector attracted 9.4 per cent of the total investments made in Q1, as against 1.5 per cent last year. According to BCR analysts Lucian Anghel and Eugen Sinca, the inflation increase will slow down in August and September. The BNR annualised inflation forecast was subject to an upward adjustment to six per cent, from the previous 5.9 per cent. The International Monetary Fund estimated that in 2008 Romania would have a 6.5 per cent inflation rate, but with a tight and prudential monetary policy in 2009 it would return to the range targeted by the National Bank of Romania. Sursa: http://www.nineoclock.ro

Tags: inflation romania bloomberg highest annual bcr bnr

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