Page 25 - Economic Outlook Romania 2019

The era of very low inflation is over, but reflation

is slow. Romania CPI is a special case…

Inflation profile looks more benign but mind CORE3 inflation: inching higher, signaling
the electoral years and NBR Board elections possible currency weakness

6.0 6.0 5.5
5.0
5.0 5.0 4.5
4.0
4.0 3.6 4.0 3.5
3.0
3.0 3.0 2.5
ING forecast 2.0
2.0 2.0 1.5
1.0
1.0 1.0 0.5 NBR target band
0.0
0.0 0.0 -0.5
-1.0
Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
-1.0 -1.0

CPI (%,YoY) CORE3 (%,YoY) NBR CPI forecast NBR CORE forecast
Food Non-food Services Inflation (%YoY)

Greatly helped by the drop in oil price The NBR’s forecasts see CORE inflation
towards the end of 2018, the central above the headline for the next two

bank managed to bring inflation back years. This could indicate more currency
within its 2.5%±1ppt target band. weakness embedded in NBR’s scenario.

25