Analysts: Inflation dropped following appreciation of leu

The annual inflation rate dropped in March, being placed in the interval 4.1-4.4% in the context in which the appreciation of the leu slowed down the increase of consumer prices and the modification of excises in January diluted its effects on inflation, analysts estimate. As for the monthly inflation, economists estimate for March an advance of 0.1- 0.4% in the conditions in which prices remained relatively stable , an important growth being noticed in the fuel segment.

The annual inflation rate went down in February to 4.49% in the lower stage of the analysts' expectations, in the conditions in which the appreciation of the leu reduced the impact of price increases for foodstuff and non food goods, which led to the slowing down of inflation from maximum 5.2% in January. "We estimate that the annual inflation continued to slow down in March, to 4.25% from 4.5% in February", the head economist of UniCredit Tiriac Bank, Rozalia Pal delcared.

In his turn, the head economist of Raiffeisen Bank Romania, Ionut Dumitru estimates that the annual inflation rate slowed down in March, to 4.1%. "Inflation was low, first of all because of the appreciation of the leu, in the lack of other important factors", he declared.

The appreciation of the leu has a favorable impact on the price of services and imported products, which leads to a slowing down of the increase of the consumer price index. "Consequently, we expect that non food goods will have a major contribution in the monthly evolution of prices, which does not exclude the fact that service prices could have a drop in March", UniCredit informs. "Inflation slowed down as a result of the effect of basic effects, being influenced by the price increase for fuel and the medium appreciation of the leu", the head economist of BCR, Lucia Anghel said, while estimating an annual inflation rate of 4.2-4.4% in March.

Most consulted economists estimate that BNR will reach the inflation target this year, NewsIn informs.

Lucian Lungu, an economist at Macroanalitica foresees that the slowing down inflation tendency will maintain reaching 3.4-3.5% at the end of the year.On the other hand ING analysts expect that inflation will return to 5% especially because of the price rise of volatile goods, as well as the ones for vegetables and fruit, even if they do not consider that 2010 will be a bad agricultural year.

The inflation target established by BNR for the end of the year was 3.5%, the inflation and so was the inflation prognosis. In 2009, BNR missed the inflation target for three times.According to UniCredit analysts, the continuation of the disinflation process supports the relaxation of the monetary policy, which may lead to a new reduction by 0.25% of the monetary policy interest rate at the next BNR meeting. "A more ample drop of the key interest rate cannot be excluded considering that the invigoration of crediting is not visible yet and the appreciation of the national currency offers an adequate context for the relaxation of the monetary policy". ING analysts will publish official data on March inflation on Monday.