Inflation in Romania will likely remain somewhat high in the coming months. The Central bank Governor Mugur Isarescu made a statement on this on Friday. In his comments, he said that it was likely that the increase in inflation will cause the workforce to demand higher wages. In turn, this will cause a price and wage spiral effect.
As reported by Bloomberg News, Isarescu said to newspapers here, "The main threat is that, with inflation staying high for a few months, this will generate a spiral effect. In other words, this could lead to requests for pay increases."
Yet, is Romania a good property investment area even with worrisome inflation? According to the Romania property company, Anglo Romanian Development, property prices here should rise some 20 to 25 per cent in 2008.
The reasons for increases include the inclusion of more of larger companies moving into Romania in the coming year. A year ago, in January 2007, Romania entered the European Union. Since doing so, it has seen a steady rise in property prices. Yet, it is not done yet.
In fact, in some areas of the country, around the capital and other larger cities, high end developments in these key areas have lead to as much as 60 per cent growth in the last 11 months.
Named property hotspots here include Cluj, Brazov, Timisoara, Arad, Constanta and Iasi. These economies are traditionally highly valued and will likely continue to grow into the future.
