Romania's economy still risky following excessive demand for consumption, Citibank analysts say

The Citibank analysts say that Romania's Central Bank (BNR) could up the monetary policy rate to at least 10.50 percent by the end of the year, despite the market prognosis that it will keep it at an annual 10.25 percent.

The annual inflation rate tempered at 8.02 percent in August, below the Citibank prognosis of 8.5 percent and the market prognosis of 8.1 percent. Citibank estimates an annual inflation of slightly under 7 percent for the end of the year.

Romania's economy faces difficulties, despite trade gap below expectations

The trade deficit below expectations posted by Romania in July triggers optimistic perspectives but cannot offset the risks generated by high financing needs and by an inadequate fiscal policy.

Romania's trade balance posted a 1.9 billion euros deficit in July, lower than the 2 billion euros gap estimated by analysts.

But pressure coming from the excessive demand will not be lifted due to the unexpected hike in the gross domestic product (GDP) in the first semester and the growth prognosis for the rest of the year, Citibank economists say.

Also, analysts do not expect an efficient fiscal policy in the context of the coming elections in November.

Citibank maintains its estimate for the exchange rate between 3.53 and 3.57 lei against the euro for the end of the year.


Source: NewsIn