BNR: Coronavirus might determine decline of inflation in Romania

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The National Bank of Romania (BNR) has included Coronavirus in its latest Inflation Report as a factor that might determine the decline of inflation this year. The new flu virus might prompt a slowdown of the global economy, said BNR governor Mugur Isarescu in a press conference on Tuesday.

 “We don’t have additional data, but we decided to introduce this phrase from two reasons: for we have seen the reaction of the World Health Organization and, particularly the latest stance of an institute in UK. From our international experience, such stances are not accidental, words are weighed. So, we introduced this element. For now, it is on the “risks” chapter, or rather “incertitude”. But the trend will be for a declining economic growth worldwide”, the central bank governor pointed out.

BNR has also considered other factors that might prompt a decline of inflation in our country: the evolution of the Eurozone (geopolitical tensions, vulnerabilities of some emerging markets), the potential escalation of the commercial conflicts, the Brext conclusion, as well the conduct of the monetary policies of the CEB and Fed.

On the other hand, the liberalization of the energy and gas markets might lead to a higher inflation than forecast, but also problems on the labour market, the labour shortages or the mismatch between the labour supply and demand.

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