BNR's Isarescu: Annual inflation rate slightly dropped toward the end of Q2 of 2019

The annual inflation rate slightly declined toward the end of this year's second quarter, remaining over the upper bound of the variation band of the target, according to National Bank of Romania (BNR) Governor Mugur Isarescu who presented on Thursday the quarterly inflation Report. 

"The annual inflation rate slightly declined toward the end of the second quarter of 2019, just as I said in the release issued three days ago, however, it remained over the upper bound of the variation band of the target. Contributing to the decline of inflation was the favourable base effect at the level of tobacco products and those with administrated prices, the correction of oil quotation, in the context of the concerns about the global economy slowing down, and one factor that is not mentioned here: the prices for vegetables and fruits also dropped. Legislative changes pushed inflation up during the second quarter. There were also supply-side shocks on the pork meat segment," Isarescu stated. 

In respect to the factors which determined inflation to increase, he also mentioned the robust annual dynamics of the net average wage in the economy and the rise in excess aggregate demand. 

The BNR Governor stated that the annual dynamics of fuel prices entered a downward trajectory, mainly due to the decline of Brent quotation. 

"The economic activity intensified somewhat surprisingly in the first quarter of 2019 and we have a positive development in the sense of improving confidence in the economic activity. It's true that, from our point of view, of the macroeconomic balances, the final consumption is the main component which pulls up the economic activity," Mugur Isarescu stated.