Central bank likely to revise inflation forecast

Financial market analysts say Romania's National Bank (BNR) will revise the inflation forecast for 2008 and 2009. Economists say BNR will increase the prognosis and expect the inflation target for 2008 to be missed. The quarterly report on inflation will be published today, according to a BNR release.

"The National Bank will increase the inflation prognosis for 2008 and 2009, which was anticipated by the monetary policy interest increase. I think the inflation prognosis for 2008 will reach 6.5 percent, from the current 6 percent," said Raiffeisen Bank's chief of macro economy research department, Ionut Dumitru.

Analysts added the inflation prognosis for 2009 will go above 4 percent, from the current 3.5 percent.

Banca Comerciala Romana (BCR)'s chief economist, Lucian Anghel, said the inflation target for 2008, of 3.8 percent, will not be reached, because BNR was left to fight alone against price hikes, while the Government went for a more relaxed fiscal policy, given the local and general elections this year. "The prognosis will be revised by 0.2-0.3 percentage points, up to 6.5 percent this year, while and the forecast for 2009 will probably not exceed 4 percent," said Anghel.

Business Standard