Analysts: 6.7-7.3% inflation in October

The rise in prices in October is partly due to the sharp depreciation of the leu. Products, whose prices are computed in euro in Romania, which depend on the exchange rate, have continued to drive up inflation. Another reason for higher inflation is a rise in prices of foodstuffs.

“The relatively sharp depreciation of the national currency has mainly affected prices directly related to the exchange rate, such as those of phone services or imported products. This situation will affect the coming months, until these stocks are liquidated,” said Melania Hancila, Head of the Research Department of Volksbank Romania. She added that she expects 0.9 percent monthly inflation in October and 7.2 percent annual inflation.

Another significant factor in the evolution of the inflation rate is related to salary pressures. “Pressures for higher salaries will affect inflation, and we will see this in 2009 as well,” Nicolaie-Alexandru Chidesciuc, Senior Economist with ING Bank Romania, told Business Standard.