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February 5, 2023

Governor of Romania’s Central Bank: Inflation to remain below 1.5% for a few months

Inflation will remain below the minimum limit of the variation range of 1.5%, at least for a few months, mainly due to the lower-than-expected decrease in the oil price internationally, Governor of Romania’s Central Bank (BN) Mugur Isarescu told a  press conference.
‘Our updated forecast indicates that, at least for a few months, inflation rate will remain below 1.5%. So, we will live a few months with low inflation (…) The main factor for this low inflation is the crude oil price. It has decreased significantly compared to the figures we estimated last summer and last autumn, when the previous forecasts were drawn up,’ said Isarescu.
He pointed out that the BNR is prepared also for such situations and has all the tools available, unlike other central banks that have reached zero with their interest rate.
The BNR governor admitted that there is a risk of inflation increase if the price of an oil barrel returns to 80 dollars, but, in his opinion, the crude oil-dependent countries will lead higher price decreases, because they have to sell more to cover their expenditures.
As to the data on inflation in the Eurozone, which show it has entered a negative territory, the BNR governor says that it is prematurely to say whether this is a temporary or a lengthy phenomenon.
‘The figures in the Eurozone are showing there is a negative inflation there. Probably I am not the one to give the verdict whether there is deflation or not, or whether this is a temporary or a lengthy phenomenon,’ said Isarescu.


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