This year’s inflation to peak in September or October

Specialists on financial markets expect an increase of 0.5-1 percent for inflation in September. October could be subject to inflation growth of 0.6 - 0.95 percent, according to a forecast by analysts. The National Forecast Commission (CNP), however, has indicated that prices will rise, but by a mere 0.4 percent in both months.

Foodstuffs, a rise in the price of natural gas, the depreciation of Romania’s national currency, and budgetary expenditures are all factors that boosted inflation in September.

“We estimate that monthly inflation in September increased by approximately one percent compared to August. The 12-month inflation rate for September could be close to six percent. Prices could peak in September.  Furthermore, there is a good chance that the rate of inflation could exceed five percent in December 2007 year-on-year. This depends on the evolution of the exchange rates, budgetary expenditures and the income policy,” Group of Applied Economics’ CEO, Liviu Voinea, told Business Standard.

Economic analyst Emil Stoica voices a similar opinion: “September will top August, but not by much. I estimate a price increase of 0.9-0.95 in September, compared to the previous month. do not think it will be more than one percent. It will be the highest this year, after August brought an increase of 0.86 percent. However, it is possible that this year’s peak will be in October, but figures will be close to those in September,” Stoica told Business Standard.

The Vice President of the Romanian Association of Financial Analysts, Dragos Cabat, also estimates a 0.95 percent price increase for September. “It is possible that the target of the National Bank of Romania for average annual inflation could be exceeded by 0.5 percent, even if an increase in utility prices is postponed until next year,” he added.

BRD-SG Corporate Finance General Manager, Aurelian Dochia, also tends to expect inflation to peak for the year in October.

The most optimistic forecast is that of ING Bank. According to Chief Economist Ciprian Dascalu, prices will increase by 0.5 percent in September and by 0.6 percent in October.
A similar forecast comes from Raiffeisen Bank’s Chief Analyst Ionut Dumitrum at 0.6 percent in September and 0.7 percent in October.