Tobacco and gasoline ignite November inflation

Analysts’ forecast had indicated an annual inflation rate of 4.3-4.5%, and consumer prices to rise 0.3-0.5%, led by tobacco, and said the central bank is very likely to contain inflation within the year-end target range, the primary risk being the devaluation of the local currency.

In October, the annual inflation rate was 4.3%.

Consumer prices increased in November by 0.67% compared to a month earlier, as non-food products climbed 1.11%, food rose 0.41%, while utility services increased 0.14%, according to data provided by the national statistical office.

Year-to-date, in Romanians’ shopping basket food products accounted for 37.58%, non-food products 44.05% and utility services 18.37%.

The biggest price increase in November was observed for eggs (7.46%), tobacco (5.48%) fruits (2.34%) and other vegetables and canned vegetables (1.96%). Fuels prices increased 1.66% in the period under review.

However, citrus fruits dropped 1.78%, potatoes prices decreased 0.78%, oil was 0.52% cheaper, corn flour prices fell 0.1% and flour 0.06%.

As for non-food products, except for tobacco and fuel, leather footwear prices grew 0.76%. Prices of electricity, natural gas and heating remained at October level. Drug prices dropped 0.12%.

Rents fell slightly in November, by 0.01% and by 2.65% year-to-date. Transport increased 0.32% and other services by 0.48%.

The average increase in consumer prices in the 12-month period through November compared to a year earlier fell to 5.7% from 5.9% in October, and consumer price index-based inflation decreased to 5.7% from 5.9%.

The National Bank of Romania has set an inflation target range of 3.5% with a +/-1% tolerance band. In its latter projection, the central bank lifted inflation target from 4.3% to 4.5%, on higher tobacco excise.