The main objective of the National Bank of Romania (BNR), namely the stability of prices was achieved in 2018, BNR Governor Mugur Isarescu stated on Monday, when presenting the Quarterly Report on Inflation, adding that the institution had a fair, well-balanced policy.
"For the past period, we have this development of the inflation rate. It entered again in the variation interval associated to the stationary target in Q4 2018, in line with our forecast. In other words, the main objective of this institution, the one related to the stability of prices, the main objective, was achieved, after a development that truly discouraged us in summer, to say so. We had a fair, well-balanced policy, by using several instruments, not only the monetary policy rate and we got to this result. Indeed, some external factors helped us. For instance, the steep drop of oil price on international markets, but, a year ago, the same factor not only it didn't help us, but it raised serious problems," Isarescu stated.
He mentioned that there was also a manifestation of some favorable basic effects in the group of processed food and electricity. This was the element that helped the BNR in the forecast according to which inflation will decline.
According to the BNR Governor, the most important thing is for the inflationary projections not to deteriorate when inflation reaches the 6 percent peak.
According to the Report, in line with the forecast trajectory, the annual CPI (the Consumer Price Index) inflation rate sharpened its downward trend in the last quarter of 2018. The indicator dropped to 3.4 percent in November and subsequently decelerated to 3.3 percent in December, thus consolidating within the range associated to the stationary target of 2.5 percent ą 1 percentage point.
In respect to the inflation outlooks, according to the baseline scenario, the annual CPI inflation rate will reach 3 percent by the end of 2019 and 3.1 percent by 2020. Compared to the previous Report, the updated scenario slightly revises upwards the forecast for the end of the current year by 0.1 percentage points, due to some higher contribution stemming from the annualized adjusted CORE 2 inflation rate, while the contributions of some other components of the consumer basket have been offset each other.
For December 2019 and December 2020, the cumulative contribution of exogenous components to the annual CPI inflation rate is foreseen to decrease significantly compared to the value recorded in December 2018 (1.8 percentage points) up to 0.9 percentage points and 1 percentage point, respectively.
Comentează