Central Bank Governor: Romania Can’t Talk About Deflation As Domestic Consumption Is Sharply Up

03.15.2016 By Gabriela Stan

Romania cannot talk about a deflation of the local economy as the country is facing a sharp domestic consumption growth, central bank governor Mugur Isarescu told a conference organized by the central bank on Tuesday.

Romanian consumer prices declined 0.24% in February compared with January, taking the annual inflation rate to -2.7%, compared with -2.1% in January, according to the country's statistics board data.

Analysts expect the inflation to return to positive territory in the first half of 2016. Romanian consumption registered one of the highest growth rates among European states.

Isarescu added that the country needs legislative stability, which is essential to encourage investments.

As for the law on debt discharge, the central bank governor said it should strengthen its social character, targeting the under-privileged, and should not include the government-backed mortgage lending First Home program.