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Isarescu: inflation to slow down in September

Governor of the National Bank, Mugur Isarescu, expressed recently the opinion that inflation would slow down in September, following that INS has released a deflation of 0.09 per cent in August and a decrease in the annual inflation (August 2007 - August 2008) to 8.02 per cent, compared to 9.04 per cent in July, Agerpres informs.

Inflation will also slow down in September, following the decrease in August, and the central bank will revise downwardly the inflation forecast for end of year, since the international oil price is much below the level considered at the most recent estimations, according to BNR Governor, who participated in a book launch. "Nevertheless, we shall revise the estimation regarding end of year inflation since we have considered USD 140/oil barrel, and now this dropped to USD 100", Isarescu said. "Inflation was within the expected range, and a new slowdown for inflation is to be expected in September", the Governor said. "We definitely expect it to decrease, but the experience of other countries and the fact that Romanians are less confident suggest that a possible delay may exist", Isarescu explained. "As inflation consolidates at low levels, the National bank shall reduce the key interest from its current level of 10.25 per cent per year", but he did not specify when the first cut is expected.

The Governor of the National Bank said that the lending rate would slow down, until end of year, following the measures adopted by the central bank. "A slow down in lending is only natural since the fundament is different, the volume at which lending is currently is helpful to us, along with the measures adopted by the central bank, to have loans more expensive", Isarescu added. The Governor said that "the main difficulty" was lending in foreign currency, where slowdown is also expected. "The loans in foreign currency were the core. This was the major difficulty. The slowdown will happen both on the basis of the measures adopted by BNR, and also due to the fact that the mother - banks have become more prudent", Isarescu said.

Vosganian: 8.5 pc GDP advance in 2008

Romania is expected to register, for the whole year, an economic growth of 8.5 per cent, as recently declared by Finance Minister, Varujan Vosganian, at the reunion of European Finance Ministers, based on Dow Jones, Agerpres informs. "This will be the best performance in the modern history of Romania", Vosganian said. At the reunion from Nice, the Finance Minister informed that Romania economic growth over the first half of the year was 8.8 per cent, a "very good" growth rate being expected for the third quarter. Some economists say that the sound agricultural production, after the drought of last year, would result in ten percent GDP growth in the third quarter. In addition, Finance Minister declared that he was expecting a solid growth next year as Romania "continues along the positive curb of the economic cycle". Varujan Vosganian added that Romania hoped to join the EUR zone in 2014, following that prior to this, it would join for two years the ERM-2 mechanism. The economic growth target for this year is six per cent.

The European Finance Ministers, in session in Nice, would attempt to coordinate their reactions against the threat of economic recession, excluding, however, a recovery plan considering their limited budgetary margin manoeuvre.

MEF: Romania, on the plus side in terms of european fund absorption

Romania has absorbed more European funding than its contribution after accession, according to those recently declared by the State Secretary in Ministry of Economy and Finances (MEF), Eugen Teodorovici, Agerpres informs.

Teodorovici gave the example that last year Romania posed a surplus of EUR 0.5 bln., whereas the contribution from our country to the European Union, for this year, amounts to EUR 1.3 bln., and the total value of funds attracted is estimated at EUR 2.8 bln. at the end of the year, which stands for a surplus of EUR 1.5 bln. He specified that Romania has attracted, until the time being, funds worth EUR 2 bln. The State Secretary believes that "we shall play, in the good sense, in 1- 2 years, with the absorption of the European funds".

Current account deficit advanced by 11.9 pc in the first seven months

The growth rate of the current account deficit slows down, as the data from the National Bank of Romania indicates.

Based on this, over the firsts even months of the year, the current account deficit increased by 11.9 per cent to EUR 9.4 bln., as The Money Channel informs.

Foreign direct investments can cover this deficit in a share of 61.4 per cent.

The advance of the current account deficit continues to reduce, as against last year. Thus, for the first seven months, it increased by 11.9 per cent to EUR 9.4 bln. The main influence on the current deficit, over January - July 2008, came from trade imbalance, which amounted to EUR 10.2 bln., which is by 9.3 per cent over the level of the previous time interval. Yet, exports outnumbered imports by 3.3 per cent. BNR data indicates an important advance in terms of direct foreign investments over the first seven months of this year, by 66.25 per cent compared to the same time period of the previous year, up to more than EUR 5.7 bln. Out of this, the capital participation and the reinvested profit accounted for 55 per cent, and the intra - group loans for 45 per cent.

 

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Tags: economic romania growth finance deficit european first current september inflation governor would isarescu expected bnr

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