BANCI | ENGLISH

BCR economists forecast for 2013 an inflation much higher than the National Bank of Romania (NBR) estimates

Autor: Bancherul.ro
2012-11-10 12:16

BCR economists forecast for 2013 an inflation much higher than the National Bank of Romania (NBR) forecat of 3.5%, the upper limit of the target range, considered "far too optimistic" and which could confirm only if there will be an agricultural year extremely good, similar to that of 2011.

BCR expects inflation to surge to 5.5% in December 2012 and 4.7% in December 2013, more than 1% above the central bank forecast.

Regarding monetary policy, BCR thinks it will remain at 5.25% next year, although governor Isarescu hinted at last press conference that it is possible even a decrease, to help the economy.

BCR:

"In the latest Inflation report issued on Wednesday, the central bank admitted that it has come up against a pretty tough choice (monetary policywise): helping a weak economy – pointing to the sizable deficit of the aggregate demand – and increasing the key rate in the face of resurging
inflation.

The dilemma gets even trickier as higher interest rates may push to the back burner, at least for a while, ongoing plans to shift lending to RON from FX. Although the central bank sees the recent spike in inflation as a temporary hiccup, it has raised the inflation forecast for both end-2012 and 2013 to 5.1% (from a previous 3.2%) and 3.5% (from 3%), respectively.

Last week, in the detailed press release issued shortly after the key rate was left unchanged at 5.25%, the National Bank changed the wording to ‘firm’ from ‘adequate’ when referring to liquidity management.

This hints at further capping the liquidity injections through a 1-week repo in the period going forward. Keeping liquidity in check twinned with interventions stemmed the leu depreciation in recent weeks. The leu currently trades at 4.51 against the European single currency.

We stick to our view on inflation and see it gliding over the central bank’s target range both in the remainder of this year and in 2013, while we postpone the chances of seeing it back within target until after 2013.

The announced price liberalization of energy prices next year (natural gas and electricity), not to mention the rise in excise duties pegged at a much weaker EUR/RON (4.52) is likely to drive inflation up by at least 1-1.5% in 2013.

Unquestionably, the negative output gap will still be there next year, suggesting muted pressure from demand-pull inflation. But no less true is – and this part is usually left out of the story – that GDP deviation from its potential, whether negative or positive, explains only 5% of the overall inflation change in the short term.

According to our baseline scenario, we expect inflation to peak at 6.8% in 2Q12 and any prospective hike in the base rate should mainly be seen in the wider context of sending out reassuring signals – especially to foreign investors – that everything is under control.

Investor expectations for a key rate change usually run high when inflation numbers are far off the target and signs of improvement are not very clear. Moreover, the European landscape remains riven with uncertainties and no one knows for sure what will come next. Meanwhile, the European Commission has pared down the Eurozone’s economic growth forecast for 2013 to 0.1% from 1%, presaging lean times ahead.

The central bank’s new inflation scenario is more dovish than ours and bets on inflation landing dead on the upper bound of the target range (3.5%) in December 2013.

Even though the central bank will never come up with an inflation forecast y+1 outside the target, we cannot help seeing it as overly optimistic, unless of course God blesses Romania with a bonanza agricultural year like in 2011.

We stick to our inflation forecast of 5.5% for end-2012 and 4.7% and for the time being see the key rate flat at 5.25% for the entire horizon.

After all, tighter liquidity management can roughly be a substitute for an increase in the base rate. But for how long?"

Comentarii

Adauga un comentariu

Adauga un comentariu folosind contul de Facebook

Alte stiri din categoria: ENGLISH

Merger of Alpha Bank and UniCredit Bank Romania

Press Release: "Alpha Services and Holdings announces a strategic partnership with UniCredit in Romania Merger of Alpha Bank Romania and UniCredit Bank Romania and creation of third largest bank in Romania by total assets, with Alpha Bank retaining a detalii

National Bank of Romania (NBR) Board decisions on monetary policy

NBR Board decisions on monetary policy In its meeting of 4 April 2023, the Board of the National Bank of Romania decided: • to keep the monetary policy rate at 7.00 percent per annum; • to leave unchanged the lending (Lombard) facility rate at 8.00 percent per annum and the deposit facility rate at 6.00 percent per annum; • to keep the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions. The annual inflation rate went down to 15.52 percent in February 2023, from 16.37 percent in December 2022, relatively in line with forecasts. The decrease was mainly driven by the sizeable drop in the dynamics of fuel and detalii

ING posts 2022 net result of €3,674 million, dividend of €0.389 per share

ING press release: ING posts FY2022 net result of €3,674 million,
proposed final 2022 dividend of €0.389 per share

4Q2022 profit before tax of €1,711 million; CET1 ratio remains strong at 14.5%
•
Profit before tax up 29% on 4Q2021 and 24% on 3Q2022, mainly driven by higher income
•
Higher net interest income, as a further increase in liability margins helped offset TLTRO impact this quarter
•
Risk costs declined to 17 bps of average customer lending

Full-year 2022 net result of €3,674 million, supported by growing customer base and increase in lending and deposits
•
On a full-year basis, our primary customer base grew by 585,000 detalii

BT Financial Results as at 30 September 2022

BT Financial Results as at 30 September 2022 Banca Transilvania – sustained growth in customers and operations during the first nine months of the year "We continued our robust growth in the number of clients and transactions, with a dynamic well above the market average. We have been growing steadily and continued financing companies and individuals, despite the fact that the financial market is more fraught with uncertainty than ever and
the funding costs and capital requirements are additional factors driving the uncertainty in the economy. We remain committed to our objective - to be the main supporter of the economy and of the state for the development of Romania", states Mr. Ӧmer Tetik, Chief Executive detalii

Vezi toate stirile

03.12.2024

1 EUR = lei
1 USD = lei

Sursa BNR

Profil de Bancher

Osman Ocal, Vicepresedinte
Credit Europe Bank

... vezi profil

Toate Profilele

Profil de Banca

EximBank

vezi detalii

Toate Bancile

Filmul Parking, un cliseu plictisitor

Toate stirile

ING Bank

Toate stirile

Ultimele Comentarii

Nu vor să aplice Legea 243/2024
Buna ziua, VĂ ROG MULT SĂ MĂ AJUTAȚI. Am încercat o soluție cu cu cei de la CSALB, cerere ... detalii
!
Era interesant de aflat cat a dat Casa regala din exedentul Casei in toate cele 7 razboaie in care ... detalii
plati online
ING respinge in mod constant platile facute online cu cardurile ... detalii
!
Greu cu limba romana! Ce legatura are cuvantul "ecosistem" din limba romana cu sistemul de plati ... detalii
Bancnote vechi
Am 2 bancnote vechi:1-1000000lei;2-5000000lei Anul ... detalii

Nume	*
E-mail	*
E-mail prieten	*
Mesaj
Cod validare	*
	Tastati codul din imagine (doar cifre)
	195.154.184.126