The hike of the VAT rate will set the inflation target at 8% for this year, according to official forecasts presented yesterday by the governor of the NBR, Mugur Isărescu, after the IMF accepted the revision of the inflation target to 7.9%.
The official forecasts perfectly match those of BURSA, which it presented right after the VAT hike, by our collaborator Daniel Ionescu, Economics PhD and international statistics expert.
As early as one week ago, while most analysts expected inflation to return to the double digits, Daniel Ionescu showed that price increases would cascade leading to an inflation rate of exactly 8.0%.
Exactly the one predicted by the NBR and the IMF.
Furthermore, he discussed the other effects of the VAT hike, forecasting, among other things, that the purchasing power of salary earnings in the public sector would decrease by more than 35% (25% due to the nominal cut, and 10% due to the raise of the VAT and inflation), as well as a decrease of the purchasing power in the real economy and in the replacement revenues of approximately 15%.
Daniel Ionescu has already used the readers of "BURSA" with his accurate forecasts, based on rigorous calculations.
His performance is all the greater, since his conclusions were presented just a few hours after the government"s decision to raise the VAT, which was rushed through, after the Constitutional Court rejected the 15% pension cut.
The Governor of the Central Bank of Romania (NBR), Mugur Isărescu, yesterday announced that at the end of 2010, the inflation rate would reach 8%.
"The estimate was also addressed to the International Monetary Fund. We must meet this figure. The end inflation forecast could categorically be revised following the information we receive. At this moment, our estimate is 8%, without a target revision", said Mugur Isărescu.
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