According to the meeting minutes of the 9 members of the NBR, the annual inflation rate will continue to rise until the end of the current year, thus exceeding the values ​​estimated for the short term in the latest medium-term forecast. board.

The August forecast predicted a cap in the third quarter and annual inflation following a gradual downward trajectory over three quarters, setting it at 13.9% in December 2022.

The evolution of private consumption may “significantly” slow down GDP growth in the third quarter

Council members emphasized the importance of attracting European funds, especially those related to the next generation EU program, which depends on the implementation of clear goals and milestones, but is essential for achieving the necessary structural reforms.

The main risks remain related to the implementation of fiscal policy, the members of the Board of Directors of the BNR agreed, referring to the implementation of the budget for the first eight months of the year and the need for budget consolidation. “The coordinates of the next budget correction this year were recognized as particularly important,” the minutes of the discussions say.

BNR board members also discussed the “increasingly obvious” trend of eroding the purchasing power of Romanians, which is reflected in the widening gap between inflation and net wages.

Net exports again fell sharply, at the same time as imports increased significantly

However, the size and pace of the deepening external deficit remain particularly worrying, even recently.

At the same time, the two-digit annual salary dynamics almost reached a plateau in recent months, implicitly increasing its negative gap with the inflation dynamics.

The ability of some companies to remain viable/profitable in the context of high costs will also be tested by the end of government support measures, as well as the need for technology, which may lead to further restructuring or bankruptcy of companies.

Although they have increased, deposits still have really negative interest rates

However, the average interest rate on new loans significantly accelerated its growth in July-August, and as a result of the increase in the IRCC at the beginning of the third quarter, as well as on new time deposits, continued to grow rapidly, including in Several Council members noted that its real level is still still remains significantly negative.

In addition, there was a recent reversal caused by the evolution of annual double-digit dynamics of loans to the private sector. After nearly two years of near-continuous growth, it began to gradually decline at the beginning of the second half, falling to 15.9% in August from 17.5% in June, even with a slightly increased set of government programs.