We will have two consecutive years inflation target failure

Even if the yearly installment of inflation got lower in the last month of last year from 6,67% in November till 6,57%, the level is with more than a percentage point over the maximum limit of the aimed interval by the National Bank. More, the estimations show that 2008 is another year in which the target will be missed.

The National Bank missed for the second time in 2007 the inflation target. In 2005, the established target of BNR was of 7,5 plus/minus a percentage point. But the rate published by the National Institute of Statistics was of 8,6%, with 0,1 percentage point over the maximum limit of the interval aimed by the central bank. And at the end of the last week, the National Institute of Statistics published a monthly installment of inflation of 0,64%, a little under the analysts estimations.

Rate over 5% in 2008

The examined analysts by the daily “Financiarul” estimated a monthly installment of inflation, of 0,7% , for December, Concomitantly, in 2008, the National Bank could miss again, the inflation target. Catalina Constantinescu, economic analyst as part of ABN Amro Bank, sustains the fact that if there aren’t adopted restrictive measures, the inflation target will be unlikely to be touched. “Our estimation is of 5% for the end of 2008”.

On his turn, Ionut Dumitru, chief-analyst as part of Raiffeisen Bank, highlights that the inflation target is almost untouchable this year. „ With the information till now, the inflation has chances to rise until 8% in April, from which is very difficult to drop until 4%”, explains Ionut Dumitru. For this year, the National Bank proposed for itself a target of 3,8% plus/minus a percentage point, the forecast for December 2008 being of 4,3%. “The only chance in order to touch the target inflation would be a very good agricultural year” adds Dumitru. The most significant rise in prices registered last year, for food products, that increased with 9,14%, shows NIS.

Significant rise in prices for food products

The service prices raised with 8,55%, and the non food products with 3,6%. The bread increased in price last year with 13,27%, the price advance for the group of miller and bread products being of 12,2%. The most accelerated increase for the food products group was recorded by the edible oil, the prices increasing up to 44,1%.

The only groups of products that registered drop in prices were the one of pork, the prices dropping with 2,52% and of eggs, where have been registered deductions in price of 1,15%.