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The budget deficit, inflation and long-term interest criteria for Romania's switching over to the single European currency, the euro, are in danger, Valentin Lazea, senior economist of the National Bank of Romania (BNR) and secretary of the committee in charge with Romania's switchover to the euro, said Monday.
According to Lazea, the aggregate budget deficit is not the only criterion in danger.
"There are two other criteria that risk becoming unlikely to be met next year because of these pro-cyclical policies. They are the criterion for inflation, that harmonised consumer price index, and the long-term interest rate criterion. Inflation is a moving target that this September was standing 1.5 percentage points above 0.4 percent, which was the average of the three best performing states, in other words 1.9 percent. Romania was fulfilling the criterion in September. Let us say that this inflation criterion will be around 2 percent next year: Romania will exceed it in March 2018 according to the current inflation forecast. Even if the criterion luckily for us reached 2.5 percent, that level would probably be exceeded toward mid-2018, according to our forecasts," said Lazea.
