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Economic growth projection revised to over 7.5 pct

This year's economic growth projection will be revised upwards by at least one percentage point to over 7.5 pct, president of the National Forecast Commission (CNP) Ion Ghizdeanu told daily Ziarul Financiar.

Ghizdeanu said that the 'premises are positive' and that although a slight slowdown was visible for industry, agriculture went past initial estimations and the building sector's growth rate stands above 33 pct. Ghizdeanu said that there is no sign of economic slowdown so far, with economic growth projections for next year standing also above 6 pct.

In July, the annual inflation rate hit a 9.04 pct three-year peak. Data supplied by the National Statistics Institute (INS) reveals a steeper rise in consumer prices of 0.69 pct in July, as an effect of natural gas and electricity tariff hikes.

The CNP president said that the estimation for year-end inflation will also be revised upwards to include the rise in prices occurred in the fist half of the year, but added that this will not be a significant change.

Ghizdeanu said that the final decision will be reached in September, after data on the exchange rate evolution and other August indicators is analyzed. In its spring forecast published in April, CNP was estimating an economic growth of 6.5 pct and an inflation rate of 5.8 pct for an anticipated average price rise of 7.5 pct.

July's inflation rate was below analyst estimates, with foodstuff prices seeing a surprising deflation of 0.7 pct, in a performance that outpaced the experts' optimistic expectations.

Analysts reckon that July's inflation was this year's high, given the basic favorable effect and the upcoming farming production that promises to be better than last year.

Experts also anticipate that inflation will drop in the months to come, so that in August and September the monthly inflation might be close to nil or prices might even undergo a slight deflation.

Head of Raiffeisen Bank's Research Department Ionut Dumitru says that there are high chances for inflation to get somewhere around 6 - 6.5 pct at year-end, given the decrease in oil prices and the strong dis-inflation effect of foodstuff prices.

Risks related to a higher inflation rate are related to the dynamics of aggregate demand, the evolution of raw material prices - fuels in particular - and the exchange rate evolution, said the Bancpost research director Dan Bucsa.

Nicolae Chidesiuc is more optimistic, anticipating a year-end inflation rate of some 6 pct - compared to the 6.6 pct projection of the National Bank of Romania - with the favorable influence of foodstuff prices expected to continue.

Sursa: http://www.rompress.ro

Tags: inflation prices revised projection growth economic

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