Inflation hovers at 9.9%, benchmark rate held once again. Trade deficit widening, now at almost 10% of GDP. Overly optimistic forecasts for reducing the budget deficit fail to perceive the highly resilient roadblocks that will be put up by various state organs.
Monetary Policy The Banca Nationala a Romaniei (BNR) continued to hold interest rates at 6.5% - one of the highest rates in Europe. Given rampant inflation, no cuts are expected until mid-2026. The next central bank meeting is scheduled for 12th November. Inflation Inflation remained at 9.9% in September, no change from August and still the highest since mid-2023 and a stark contrast to 2024’s 4.8%. Recall that the BNR’s target range is 1.5-3.5%. Most forecasts are for 9-9.6% by year end, but many did suggest September would see a rise to 10.1%. We remain unconvinced that inflation will fall inside this year without dramatic change. Trade Budgets New data show that Romania’s trade deficit widened 17% YoY, now hitting €33.5Bn an...
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