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March 31, 2023

BNR revises 2013 inflation projection downwards to 1.8 pc

The interest rate for the new loans in the leu currency for the population records significant declines, BNR Governor Mugur Isarescu said.

The National Bank of Romania (BNR) revised sharply downwards its inflation projection for this year from 3.1 per cent to 1.8 per cent, as well as its year-end inflation projection from 3.1 per cent to 3 per cent, also predicting a decline in the inflation rate below the variation level in the first half of 2014 and then a comeback. “As we kept our composure last summer, when the annual inflation rate jumped sharply because of the drought and the political turmoil, we should have the same attitude also now when the annual inflation rate declines and will continue to decline to record level,” BNR Governor Mugur Isarescu said yesterday at the presentation of the central bank’s Quarterly Report on Inflation. He also said that the domestic demand increases at a slow pace and the general economic situation is stagnating.
As regards funding, Isarescu stated that the number of forex loans will keep going down, but at a slower pace, also adding that the interest rate for the new loans in the leu currency for the population records significant decline. The BNR governor also believes that neither clients trust any longer the banks, nor the lending institutions put their trust in their possible clients.
Moreover, Isarescu said the central bank is not yet aware of the calculation methodology for the fiscal measures the Romanian Government, the International Monetary Fund (IMF) and the European Commission agreed to. Therefore, the impact upon the inflation could range between 0.2 and 0.6 percentage points due to the excise tax level, with the property taxes not being taken into account for the 2014 prognosis.
On the other hand, the BNR head pointed out that the data available on the crude oil futures market currently show a decline in quotations until next autumn, and this situation could have a positive impact upon prices in general. Isarescu added that the impact could be calculated only when the authorities establish the manner in which excise taxes will be calculated in 2014, and the scenario requires however a laborious calculation. Under these circumstances, it’s easy to understand that the new 2014 inflation projection of 3 per cent did not take into consideration the effects of the fiscal measures the Government has announced.
Mugur Isarescu also stated that the rumours about his possible candidacy to the 2014 presidential elections are baseless, also adding he held no discussions on this topic. On the other hand, he made no remark as regards his candidacy for another term as BNR head. When asked by journalists if BNR’s objectives do not entail a longer time horizon, Isarescu said that more than 20 years of tenure seem like enough.
Olteanu, BNR: Card payment should be extended, to public administration included
The increase in the number of transactions through non-cash payment instruments trims costs and that is why the expansion of utilization areas is necessary, including when paying fees, taxes, fines, and also more talks about the costs of cash transactions should be held, BNR Vice Governor Bogdan Olteanu said, according to Mediafax.  He also said that despite the fact the Romanians tend to feel more comfortable when “keeping money in their pockets”, the number of transactions through non-cash payment instruments should be extended to more fields, one of them being the administrative sector.

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