Friday, May 8, 2009

Romania set for 4.4 per cent inflation this year

07 May 2009, 14:46 CET

(BUCHAREST) - Romania, on course to receive nearly 24 billion dollars in IMF and EU loans to battle an economic slump, is likely to see inflation of 4.4 percent this year, the central bank said Thursday.

This will be brought down to 3.5 percent in 2010, the central bank added.

Bank governor Mugur Isarescu said the 2010 target was part of an agreement with the International Monetary Fund, adding that "while it might appear to be too ambitious, we think it is realistic."

He said that this year's inflation, following a rise in the first quarter, was showing signs of easing in response to lower import and food prices and should come to 4.4 percent.

Isarescu also said he foresaw economic growth in Romania this year despite IMF forecasts of a contraction.

"In the first quarter there was no doubt -- Romania was in recession. But the year has four quarters and I think that for all of 2009 growth will be positive."

The country had a record 7.1-percent economic expansion in 2008.

But in light of the global economic downturn, the European Union's executive commission on Wednesday approved a loan of 5.0 billion euros for Romania, according to Prime Minister Emil Boc.

"We have received written confirmation from the commission on the award of this loan," he said.

The announcement came two days after the IMF board gave its approval to a loan for Romania of 12.9 billion euros.

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