Annual inflation rate, likely to rise gradually in coming months

The annual inflation rate is likely to increase gradually in the coming months, thus exceeding the slightly decreasing values highlighted on this time horizon by the medium-term forecast of November 2021, show the minutes of the January 10, 2022 monetary policy meeting of the Council of Administration of the National Bank of Romania (BNR).

At the meeting, it was recalled that the forecast indicates a peak in the dynamics of inflation of 8.6% in June 2022, followed by a decrease to 5.9% in December 2022 and then to 3.3% in September 2023 - slightly below the upper limit of the target range.

The new worsening close outlook for inflation is entirely attributable to the direct and indirect effects, recent and future, of adverse supply-side shocks, which affect both the evolution of exogenous components of the Consumer Price Index and the dynamics of core inflation, the members of the Council underscored several times.

The BNR Board decided by a majority of votes - 7 votes in favor, 2 votes against - to increase the monetary policy interest rate to 2.00 percent, from 1.75 percent; 2 members of the Council voted to increase the monetary policy interest rate to 2.25 percent.