Inflation rise takes central bank and analysts by surprise
It's farewell to declines in the NBR interest rate until the end
of the year; the Romanian currency will continue to strengthen
against the euro because the central bank will try to temper prices
of import goods. These are the main effects anticipated by analysts
after the negative surprise of February inflation, when the annual
rate abruptly leapt from 6.9% to 7.6%.
Although visible both on the cash receipts issued in supermarkets
and on marketplace stands, the 1.8% month-on-month price increase
calculated by the Statistics Institute came as a big surprise both
for analysts and the NBR. The price of potatoes went up by more
than 10% in February, flour became 2% more expensive, the price of
vegetable oil rose 2.7%, that of bread went up 2.3%, while the
price of milk rose 2.4%.
According to ZF calculations based on prices of products listed on
hypermarket shelves, flour, sugar, vegetable oil and potatoes
became over 30% more expensive between July 2010 and February
2011.
Food producers warned in the autumn of last year that a wave of
price hikes was coming, largely prompted by the increase in the
price of raw materials, but NBR governor Mugur Is`rescu called them
"blabbermouths" and accused the press of proliferating their points
of view.
On February 7, when the quarterly report on inflation was
presented, the governor anticipated that after the decline of
annual inflation below 7% in January, "several months of stagnation
will follow." On Wednesday March 9, a day before the release of
official figures, he said inflation would remain within the
7.2-7.5% interval until this summer.
Even base inflation (which excludes prices of tobacco, fuel,
vegetables and fruit, eggs, as well as controlled prices), which
the NBR says it can directly influence, went up from 4.3% to 4.6%
in February.