The annual inflation rate is expected to sharply increase in the second quarter of 2022, to 11.2% in June, compared to 8.6% in the previous projection, according to the central bank of Romania.

“Regarding the future macroeconomic developments, the members of the Council discussed at length the new forecast scenario, showing that, in the context of available data and the regulations in force, it shows a considerable worsening of the inflation outlook, almost exclusively in the short term.

”Thus, the annual inflation rate is expected to sharply increase in the second quarter of 2022 – to 11.2% in June, compared to 8.6% in the previous projection – and to decrease only gradually over the next three quarters, on a much higher trajectory than previously forecast, remaining in December 2022 at 9.6%, compared to 5.9% in the previous forecast.

”However, it is expected to experience a relatively sharp downward adjustment in the first part of next year, amid broad base effects, and to return in the fourth quarter of 2023 within the target range, only slightly later than previously anticipated, falling in December at 3.2%, marginally below the level indicated by the forecast for November 2021,” say NBR officials, writes Agerpres.

According to the NBR, it was observed that the main additional inflationary effects are expected to come from much larger increases in natural gas and electricity prices, which will be highlighted after the suspension in April of the compensation schemes applied for household consumers; they will probably be followed by a few small increases in the second half of 2022, justified by renewals of supply contracts and will be accompanied by additional but much more modest influences, anticipated by other exogenous components of the CPI, including fuels.