ECONOMY

Romanian 2005 inflation seen up to 7.5 pct

BUCHAREST (AP) – Romania’s inflation could reach 7.5 percent this year, slightly higher than predicted, although the target is still 7 percent, the governor of Romania’s National Bank said yesterday. Speaking at a bank conference, Mugur Isarescu said inflation may be above the 7 percent mark he had predicted earlier. Energy price hikes and higher taxes on tobacco and alcohol, which were introduced April 1, caused a jump in inflation last month, when it reached 1.8 percent. The consumer price index rose 1.9 percent on the month in April, compared with a rise of just 0.3 percent in March. The government wants to reduce inflation, from a rate of 9.3 percent in 2004, as Romania prepares to become a member of the European Union in 2007. Romania is aiming to adopt the euro by 2014, but must meet strict fiscal criteria to do so. The government aims to trim the budget deficit to about 0.7 percent of gross domestic product this year, from the 1.5 percent planned initially, and down from 1.2 percent in 2004. The country is also cutting four zeros off its currency, the leu. The new bills will be introduced on July 1.