Romania Special Report | Labour Market Should Prevent Early Dovish NBR Pivot
We look at the current state of the Romanian labor market through the lenses of a Phillips curve equation, a NAIRU model, Okun’s law, Beveridge curve, a big data nowcasting model and several time series statistical data. We concluded that the labor market remains tight and high inflation is the main driver for strong nominal wage growth. This highlights the risks of a wage-price spiral. Key rate cuts by the NBR could start in mid-2024, later than in other CEE countries, due to robust real wage growth
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