The National Bank of Romania (BNR) has revised upwards its inflation forecast for the end of 2026 to 5.5%, from the previous estimate of 3.9%, and anticipates that inflation will reach 2.9% by the end of 2027, according to data BNR Governor Mugur Isarescu presented on Tuesday.

'Regarding the forecast, there are two things we must tell you. You see, in terms of economic growth, based on the data available two weeks ago when the material was prepared, the May inflation report, we have a significantly lower level of growth across the European Union in 2027. I read this morning the Commissioner for Economy, who said there will once again be downward revisions to this year's economic growth forecast. As for inflation, it is higher. He also said yesterday, and I read it this morning, that the inflation figure will also be revised. So it will probably not be 2.7%, perhaps it will be 3% or above 3%. In fact, in America the inflation figure of 3.8% was published two days ago, while in the United Kingdom it stands at 3%. Therefore, the inflationary impact of Hormuz is quite significant. This is our revised forecast, discussed in several meetings of the Monetary Policy Committee. We have slight inflationary pressures, which have intensified. We were even reluctant whether this should appear in our release a few days ago, but we are telling the truth. The idea that the National Bank is forecasting rising inflation was amplified, whereas the following sentence was clear: inflation is halving, from almost 11% to around 5%. The fact that it will rise by 0.1 to 0.3 percentage points in May and June became exaggerated at societal level. It will probably rise until July, maybe to 11%, but the increases are small, because then in July, August and September we will already have inflation of around 6%, and towards the end of the year, just above 5%,' Mugur Isarescu told a press conference.

He mentioned that the forecast is based on the data currently available. The BNR governor also said that the projections are strictly conditioned by assumptions regarding the implications of the conflict in the Middle East and a return to a minimum level of political and governmental stability, namely the existence of a government.

'It is possible that inflation will also rise in Europe, though not necessarily to 5.5%. In the end, we may no longer be inflation champions in autumn. We would like that, but it does not depend solely on us,' Isarescu said.

The Governor of the National Bank of Romania held a press conference on Tuesday to present the new quarterly Inflation Report. AGERPRES (RO - writing by: George Banciulea; EN - writing by: Adina Panaitescu)