The National Bank of Romania (BNR) has revised upwards its inflation forecast for the end of 2025 to 9.6%, from the previous 8.8%, and anticipates that it will reach 3.7% at the end of 2026, compared with 3% in the previous projection, according to data presented on Friday by the BNR Governor, Mugur Isarescu.
"Annual inflation calculated on the basis of the consumer price index follows an almost continuously downward path, with a significant adjustment in the third quarter of next year, a reduction of 5 percentage points. When? When the direct impact of supply-side shocks drops out of the base. What else do we observe? That compared with the summer projection, in the previous inflation report, we now have a noticeably higher inflation curve. What was underestimated in summer? Primarily, the impact of administrative measures, the liberalisation of the electricity market and the increase in indirect taxes in the third quarter, especially on the electricity side, and also, so to speak, an impact that is hard to measure: inflation expectations, which have become more pronounced. It is a politically and socially tense environment in the country at the moment and, of course, all these discussions push price increases higher than we had anticipated in the summer months," Mugur Isarescu said at the presentation of the quarterly Inflation Report, agerpres reports.
According to the BNR, inflation is expected to return to the target band in the first quarter of 2027.
The BNR Governor also noted that in 2025 almost half of inflation will be driven by indirect taxes - VAT and excise duties - as well as electricity and natural gas.
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