Wednesday, March 11, 2009

Romania c.bank: Feb CPI slightly higher than expected

BUCHAREST, March 11 (Reuters) - Romania's annual inflation, which quickened to 6.9 percent in February from January's 6.7 percent, is slightly higher than expected, central bank chief economist Valentin Lazea said on Wednesday.

The central bank has a year-end inflation target of 2.5-4.5 percent and its 2009 forecast stands at 4.5 percent.

'It is slightly higher than we expected, it shows that inflationary pressures remain but it is too early to revise our forecast for the end of the year,' Lazea told reporters.

'It is a warning signal that the impact of the exchange rate is stronger than initially estimated. Anyway, inflation is not the number one macroeconomic concern. It is the reduction of the current account deficit.'

Asked if Romania could avoid tax hikes triggered by a potential IMF deal, Lazea said:

'I don't know ... There will be two weeks of discussions, everything is possible, I cannot predict what will happen or what conditionalities will be agreed.'

Asked also if Romania could turn down a bailout package, he answered: 'This possibility exists. It will have a negative impact (on the market).'

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