The central bank estimates that the inflation rate will slightly
\nfluctuate around the 5% threshold in the coming months, and in the 4th
\nquarter of the year it will diminish, said the governor of the National Bank of
\nRomania, Mugur Isarescu, upon the presentation of the quarterly report on
\ninflation. He pointed out that, of late, price hikes have been generalized
\nagainst the backdrop of an increase in the demand surplus and of production
\ncosts. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
These developments highlighted by the central bank’s surveys are
\nrelated to the robust consumption growth rate, although this rate was slightly
\ndiminished in comparison with the peak value reported in the 3rd quarter
\nof last year, by the consumers’ ever – deteriorating confidence, by investments
\nre-balancing, especially in the private domain, and by the quasi-stagnation of
\nthe non-governmental total credit, starting this summer. <\/p>\n
<\/p>\n
\n
\n
\n
<\/p>\n
This latter phenomenon, caused by a drop in the loans taken out by
\ncompanies, is also the result of a poor capitalization of Romanian companies,
\namong other things, many of these companies being unable to qualify for taking
\nout a loan. Mugur Isarescu explained that people often make confusion between
\ncapital and debt. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Mugur Isarescu: The illusion of
\ncapitalizing a company by taking out a loan is very dangerous and it can make
\nyou go bankrupt. If you want to have a solid company, you need to rely on a
\nstrong capital. Capital should not be mistaken for something else, and the
\nRomanian companies do need capital. Private companies, owners need to bring
\ntheir own capital and stop thinking that banks will help them in this regard.
\nBanks only grant loans.<\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Other significant phenomena highlighted by the central bank governor
\nare the deepening of the current account deficit and the rise in salaries,
\nincluding in the minimum wages, an evolution that cannot be and should not be
\nstopped, but that should be made in a controlled manner, depending on what the
\neconomy can absorb, so that it should not be significantly reflected in price
\nrises. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Talking about the importance of a stable macroeconomic framework,
\nMugur Isarescu said that the monetary policy had to become restrictive. He
\nexplained that the national bank did not intend to stop the economic growth,
\nbut that it was only trying to reduce the demand surplus to reasonable limits. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
During Monday’s meeting on monetary policy, the central bank decided
\nto increase again the key interest rate to 2.5%, after a break in April, and
\nafter two other growths were decided upon in the first 2 months of 2018.
\nAccording to Mugur Isarescu inflation will be kept under control and interest
\nrates will not skyrocket, after the national bank has decided to carry on with
\nthe consolidation of the monetary policy. <\/p>\n
\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The National Bank of Romania has revised upwards from 3.5% to 3.6% the annual inflation rate forecast for the end of 2018. However, it reduced also by 0.1% the forecast for December 2019, which had been previously estimated at 3%.<\/p>\n","protected":false},"author":107,"featured_media":67300,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[29332,30253,29630],"coauthors":[],"class_list":["post-77613","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-economic-growth","tag-mugur-isarescu","tag-national-bank-of-romania"],"acf":[],"yoast_head":"\n