Central Bank Governor Mugur Isarescu drew the attention towards the fact that the monetary policy of the institution he leads must be helped and supported by the wage and fiscal policies of the Romanian Government.
"It is impossible to have a long term inflation rate under 10% when the salaries grow with rates well above 10%”, said Isarescu in an interview for the Market News International (MNI) news agency.
The annual inflation rate in Romania reached 6.8% in October, two points above the level expected by the Central Bank (BNR) only a month ago.
The rate, Isarescu says, reflects the multiple effects of the drought this summer, the price growth for raw materials on the international markets, the general decrease of disinflation influences caused by imports and the fall of the Romanian currency, RON, caused by the turbulences on foreign markets.
For December, Isarescu believes that the consumption goods’ prices will maintain a rate above 5%, although it is not probable to have an inflation rate over 6%. Speaking of inflation, Isarescu maintains an optimistic, but prudent tone.
"We have the inflation under control and we expect this growth to end in spring 2008”, adding that „maintaining the inflation at a low level is a matter that depends on a series of aspects”.
According to NewsIn, the average growth of wages was constantly over 20%, while the labor productivity only grew 10-11%, this factor putting pressure on the consumption prices.
Isarescu believes that the economic growth will slow down some 1-2%. In 2007, the economic growth was already slowing, with a maximum expected at the end of the year of some 6% or less, after a 7.7 growth in 2006.