Wires

INSTANT VIEW 1-Romania inflation accelerates in Sept, industry falls

BUCHAREST, Oct 10 (Reuters) - Romania's annual inflationjumped to 5.3 percent on the year in September, above thecentral bank's target and reducing its scope to cut interestrates to help a languishing economy.

Central banks elsewhere in eastern Europe are in easing modeas market rallies driven by U.S. and European stimulus leavethem more scope to tackle disappointing domestic demand.

But a Romanian easing cycle stopped in May after fourconsecutive quarter point cuts, as the start of a bitterpolitical crisis heightened uncertainty and sent the leucurrency to record lows. Analysts expect rates to stay on holdat 5.25 percent well into next year.

Inflation quickened from August's 3.9 percentdue to a poor harvest, weak currency and energy price hikes andmost analysts expect it to remain higher than the central bank'stargeted band of 2-4 percent at the end of this year.

Other data showed Romania's adjusted industrial output

fell 1.1 percent on the month in August and the tradedeficit widened 4 percent to 6.3 billion euros onthe year in the first eight months.

MARKET REACTION

The Romanian leu was largely unmoved by the datatrading at 4.571, 0.1 percent higher on the day.

MARKET FORECAST

A median forecast of 14 analysts polled by Reuters earlierthis month expected annual inflation at 4.7 percent in August,and a 0.5 percent advance on the month.

KEY FIGURES CPI (pct change) SEPT AUG yr/yr 5.3 3.9 mth/mth 1.2 0.5 INDUSTRIAL OUTPUT AUG JULY change mth/mth (pct) -1.1 1.1 change yr/yr (pct) -1.1 1.9 TRADE DEFICIT JAN-AUG JAN-JULY bln euros 6.307 5.327 pct change (yr/yr) 4.0 0.8 IMPORTS (bln euros) 35.960 31.417 EXPORTS (bln euros) 29.653 26.090 ANALYST COMMENTS: VLAD MUSCALU, ECONOMIST AT ING BANK IN BUCHAREST

"It seems that we underestimated the inflation pick up. Itis probable to see inflation at around 6 percent at the end ofthe year. Rate hikes now become more probable again but, maybe,there won't be aggressive moves."

"The first rate hike will probaly be in the first quarter of2013."

BACKGROUND LINKS:

- For LIVE Romanian economic data releases, click on

- Overview of Romanian macroeconomic indicators

- Key data releases in central Europe

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- For Romanian money markets data click on

- Key data releases in central Europe

- For Romanian speed debt speed guide

- For Romanian money markets data click on

(Reporting by Ioana Patran and Radu Marinas; Editing by SamCage)

((sam.cage@thomsonreuters.com)(+40)(0)(21 305 5266)(ReutersMessaging: sam.cage.thomsonreuters.com@reuters.net))

Keywords: ROMANIA ECONOMY