The National Bank of Romania has given assurances that Romania does
\nnot face the risk of deflation. The annual inflation rate dropped to minus 1.9%
\nin August compared to minus 1.7% in July, thus reaching its lowest level in the
\nlast 25 years. According to the National Institute for Statistics, this is the
\nthird consecutive month to report a fall in the inflation rate. Food products,
\nin particular eggs, sugar, potatoes and corn flour, saw the highest decrease in
\nprices, which dropped by more than 7% in August compared with last year. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Analysts say the negative annual inflation rate is largely the
\nresult of the reduction in the VAT for food products. This downward trend may
\ncontinue until May 2016 following the cut in the VAT rate for food in effect
\nsince June and in the standard VAT rate to 20% starting next year. The fall in
\nthe inflation rate has been more abrupt than expected by analysts, who also say
\nthe inflation rate will not come back to the target set by the National Bank of
\nRomania before 2017. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
The figures confirm the bank’s forecasts for this summer, according
\nto which the inflation rate will remain negative over the next three quarters.
\nDespite this, the governor of the National Bank Mugur Isarescu says Romania
\ndoes not risk going into deflation because there is no inflationist pressure as
\na result of an increase in public sector salaries and because consumption has grown
\nand may even reach 10% by the end of the year. While not entirely reflected by
\nprices, the VAT cut for food and drinks will in time lead to a growth in
\nconsumption and give a new boost to economic growth, the government hopes. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
The National Commission for Prognosis recently improved economic
\ngrowth figures for 2015 from 2.8 to 3.3% and says the pace of growth may pick
\nup even more in the coming years to reach 4% by 2018. The European Commission,
\nthe World Bank and the European Bank for Reconstruction and Development
\nestimate that the economy will grow by over 3% on an average in the next few
\nyears. Romania had one of the highest economic growth rates in the European
\nUnion in the second quarter of 2015 compared with a similar period in 2014. Its
\ngood economic growth rate, low inflation, stable leu-euro exchange rate and low
\npublic debt make Romania a possible destination for foreign investors. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Next to Malta and the Czech Republic, Romania has seen the highest
\nannual economic growth rate in Europe. In the second quarter of the year,
\nRomania’s economy grew by 3.7% compared with the similar period last year,
\nwhile Malta’s economy grew by 4.8% and the Czech Republic’s by 4.4%. <\/p>\n
\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
At minus 1.9% in August, the annual inflation rate reached a new low in the last 25 years.<\/p>\n","protected":false},"author":107,"featured_media":65133,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[29332,29488,30541,31822],"coauthors":[],"class_list":["post-65132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-economic-growth","tag-inflation","tag-national-bank","tag-vat"],"acf":[],"yoast_head":"\n