Inflation to reach 3% in December

Former Prime Minister Mugur Isarescu estimated that inflation would stand at around 3 percent in December, which makes the annual rate reach a 40-41 percent level. For next year, the new Government aims at an inflation rate of 25-30 percent.

Isarescu specified that the inflation level stood at 1.6 percent in the first half of December, but afterwards SNP decided to increase fuel prices, which means that inflation might be on the increase.

“On December, inflation may not exceed 3 percent, which will trigger an annual level of consumption prices’ index of 40-41 percent,” said former PM Mugur Isarescu.

He added that annual value would approach 42 percent in case inflation on December exceeded 3 percent. Until November, inflation stood at almost 34 percent.

The Government expected an inflation rate of 27 percent in 2000, but its value turned out to be much higher. The most important deviations from monthly targets were registered in April and during the summer.

In April, consumption prices’ index stood at 4.8 percent following VAT introduction for electric and thermal power.

For the summer months, the Executive had estimated a monthly inflation rate of less than one percent in order to observe the 27 percent target, but the draft and the increase of oil’s global price made the inflation rate exceed these forecasts by far.

At a domestic level, the inflation rate was affected by public utilities’ lack of restructuring and by the high level of arrears.

The medium term economic strategy aimed at joining the European Union stipulates inflation rate’s cut down by 2004, so that it might be expressed by only one figure.