The inflation will probably peak in the third quarter of this year as the risk scenario published in the spring by the National Bank has been already reached, says the spokesperson of the central bank, Dan Suciu.
“The peak of inflation will probably be reached in the third quarter. Our main scenario, which we published in the spring, was about a peak in June, July, but we also had a second, risky scenario, with many elements that would be engulfing supplementary risks. Unfortunately, that scenario materialized. All the risks we have posed, from fuel prices to raw materials, rising worldwide, an agricultural period with certain difficulties, the continuation of the war in Ukraine and a few others domestic risks have become real and, consequently, the peak of this quarter is likely to move into the third quarter,” Dan Suciu explained, at Digi24, according to Agerpres.
According to him, most of the price increases took place between March and June, and in the next period smaller adjustments will follow.
“It is important to say that much of the rise in inflation or the rise in the inflation rate occurred in March-June, followed by possible minor adjustments. The peak is close. We estimated a 14 percent increase this month (July), which is currently of 15%, so we are somewhere close,” the quoted source added.
On the other hand, Suciu mentioned that the recession is a scenario taken into account, showing that the economic advance in the first quarter, which exceeded expectations, was based on a significant increase in consumption, probably based on the savings made in the pandemic.
“Recession is most likely a scenario that we are considering but trying to avoid. Rising energy prices have, as the governor said, a double effect. Both a recessionary effect and an inflationary effect. Which creates big problems in managing a subject of such complexity through monetary policy decisions but also through fiscal-budgetary policies. These are the pressures and challenges at the moment, difficult to quantify and difficult to predict in concrete, simplistic lines, which help to understand the situation. But the situation has its complexity and consequently it is very difficult to translate in very simple terms,” Dan Suciu stressed.
According to him, if the pressure of energy prices continues, the situation will be felt in the fall.
“In the first quarter there was a period when we had a significant increase in consumption, probably based on the savings made in the pandemic, the desire to spend money from the pandemic, this was fully manifested. Let’s not forget, however, that we also had significant salary increases, including in the first quarter of this year. Until April, the annualized wage growth index was of 10% – as inflation at that time- so, in fact, inflation was not felt in the first months of the year since we had average wage increases in inflation. Now we are in another period. Things are a bit more complicated, probably in the autumn, if the pressure of energy prices continues to manifest itself, this complicated situation will be fully felt. That is why we say that the peak of the problems will be registered in the third quarter,” the BNR representative explained.