National Bank of Romania – NBR significantly increased its forecast for the annual inflation rate for this year. According to the latest press release, Romania’s Central Bank raised the inflation rate forecast for 2021 to 4.1%, way outside its target band of 1.5-3.5%. This is a significant increase from the previous forecast, issued in March, when the forecast was only 3.4%.
The inflation rate increased in Q1 in Romania and the prices started soaring, especially for food, but also for services. This came as the energy market liberalization from the beginning of this year raised prices for the household consumers, but also it came amid attempts from the authorities to revitalize the economy by injecting capital into the market.
The inflation rate forecast didn’t change the central bank’s monetary policy rate, set up at 1.25%, the lowest in Romanian history.
On the other hand, according to the international financial experts from IMF, S&P, or even from the European Commission, Romania will have a steady economic growth this year and the next, by 5% on average. This is very good news for the country and for the entrepreneurs who could start off strong as the pandemic is fading.