BNR Governor: Inflation forecast revised by central bank upwards to 2.7 pct for end-2017. The country has an economically inactive population of almost four million people aged between 15 and 64

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The National Bank of Romania (BNR) revised upwards to 2.7 pct the inflation forecast for the end of 2017, central bank governor Mugur Isarescu said on Thursday.

The previous inflation prognosis was parked at 1.9 pct in 2017.

As for the end of 2018, the BNR estimates an inflation rate of 3.2 pct, similar to the previous forecast, and for the end of 3rd quarter of 2019 a 3.1 pct inflation rate is expected.

According to the BNR, the exceeding of the upper limit of the target interval in the first part of 2018 is mainly due to some basic statistical effects associated to the cut of certain taxes and indirect dues at the beginning of 2017, the anticipated evolution of the exogenous developments and the accumulation of inflationary pressure linked to the domestic milieu, at the basic inflation’s level.

Calculated for constant taxes, the inflation rate will reach 3.3 pct in December 2017, 3.1 pct at the end of 2018 and 2.9 pct at the prognosis’ time horizon, 30 September 2019.

 

Romania is facing a widening shortage in highly trained workforce.The country has an economically inactive population of almost four million people aged between 15 and 64

 

Romania is facing a widening shortage in highly trained workforce, Governor of the National Bank of Romania (BNR) Mugur Isarescu said on Thursday, adding that the country’s economically inactive population is almost four million people who, although of employable age, are not working, are not looking for jobs and are not self-employed either.

“Romania has a surplus of primary and secondary-school graduate employees, who make up a less trained workforce. There is also a surplus of professionals, but it is decreasing, while at the same time Romania is facing a shortage of highly trained workforce. Such workforce is increasingly more being demanded in Romania. The country has an economically inactive population of almost four million people aged between 15 and 64 who, although of employable age, do not have a job and are not seeking one and are not self-employed either,” Isarescu said at a news conference where he released BNR’s quarterly report on inflation.

According to him, of this economically inactive population, only 10 percent would be ready to work, although not looking for a job. In addition, half of these people live in the countryside, 46 percent are only secondary school graduates, and 50 percent are high school, post-secondary school or vocational school graduates.

Among the young people, only 80 percent are in school, while the others are not gainfully employed, Isarescu added.

He warned that there is a certain degree of tension on the labour market that is a structural problem.

“There is another serious problem, namely a degree of labour market tension, which we have set to analyse. It is not necessarily in our province, but we know that labour market tensions are a structural problem in the labour market, pushing wages upwards. So even if there were no let’s say stimulating wage policy, pay keeps on tending to increase because of migration, because for instance, when someone comes from abroad seeking employment he or she will also come with different demands, and hence the tension,” said Isarescu, according to Agerpres.