Romania slashes inflation forecast with VAT cut on horizon

mugur-isarescu
Governor Mugur Isărescu

The National Bank of Romania has slashed its forecast for inflation in 2015 as a result of the government's plans to cut VAT on all food items by 15% in June.

In its latest inflation report, released today (May 8), the central bank cuts its annual CPI forecast from 2.1% to 0.2% at the end of 2015, and from 2.4% to 1.9% at the end of 2016.

The central bank decided to cut its policy rate by 25 basis points to 1.75% on May 6, citing concerns over the risk of inflation remaining below target when

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