----- Original Message ----- From: [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Sunday, October 10, 2004 11:33 PM Subject: [romania-economics] news POLL-Romania Sept CPI seen up, rate cuts in sight POLL-Romania Sept CPI seen up, rate cuts in sight BUCHAREST, Oct 8 (Reuters) - Romania's monthly inflation is set to quicken in September and October but the EU candidate's goal of a single digit rate by the year-end remains safe, leaving room for cautious interest rate cuts, a Reuters poll of analysts showed on Friday. The ex-communist country, which has one of the highest inflation rates in the region, wants to slash the rate to 9.0 percent this year from 14.1 percent in 2003. It has promised its main economic mentor, the IMF, a tight fiscal policy to help to rein in the current account deficit to 5.5 percent of gross domestic product this year from 5.7 in 2003. Romania, which aims to join the European Union in 2007, holds both presidential and parliamentary elections on Nov. 28. Analysts have warned that parties' promises of higher wages threaten the Balkan country's hard-won macro-economic stability, including faster economic growth. The median estimate of 13 analysts polled put inflation at 0.8 percent in September and 0.9 in October versus August's 0.5. The year-on-year estimate is 9.2 percent, almost flat from the previous poll but lower than about 12 percent at present. "Higher fuel and utility prices will lead to an uptick in inflation, mainly in October, but won't put the single digit objective at risk," said ABN Amro senior analyst Radu Craciun. Rising world oil prices triggered a 10 percent hike in fuel prices late in August, while gas and railway tariffs rose five and 5.6 percent respectively this month. RATE CUTS The poll showed further cuts in the central bank's (BNR) key interest rate, used to drain money market funds, were expected to be regular but moderate until the end of the year, with monetary easing set to gain pace in 2005. It predicts the key rate will fall to 18.25 percent this month from 18.75 now, foreseeing cuts of 50 basis points in each of the next two months. It is estimated to fall to 15.5 percent next March. The BNR has cut the rate by 250 basis points since June, after hiking it three times in 2003 to tame inflationary pressure as the current account gap ballooned. "Expectations of faster easing early next year signal confidence that inflation will fall and may also be linked to the need to reduce interest differentials ahead of plans to further open the capital account," said a local analyst. Romania has said it may allow foreigners access to local leu deposits next March as part of moves to free up capital flows in the EU convergence drive. The poll showed analysts expected a wider 2004 trade gap -- the main driver of the current account -- of 4.6 billion euros versus 4.5 billion previously and compared with 2.83 billion over January-August. It forecast this year's budget gap at 1.95 percent of GDP on average versus an IMF-agreed target of 1.64. Analysts revised upwards this year's GDP growth forecast to match the official target of 6.5 percent, and they foresee a 2005 expansion of 5.5 percent. 10/08/04 05:42 ET ------------------------ Yahoo! Groups Sponsor --------------------~--> $9.95 domain names from Yahoo!. Register anything. http://us.click.yahoo.com/J8kdrA/y20IAA/yQLSAA/RR.olB/TM --------------------------------------------------------------------~-> EuroAtlantic Club: http://www.europe.org.ro/euroatlantic_club/ *** Birou de traduceri autorizate. Contact: Oana Gheorghiu - 252.1947 / [EMAIL PROTECTED] Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/romania_eu_list/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
