June inflation rate increased to 0.16%

Compared with the trailing month, consumer prices increased 0.16% in June, as food prices fell 0.06% and services rose 0.57%, while non-food inched up 0.16%.

In May, the annual inflation rate widened to 4.42% while on a month-on-month basis, inflation rate came in at 0.15%.

The biggest price growth for food items was observed in potatoes (9.36%), citrus fruits (7.10%), as well as other fruits. As for non-food the biggest hikes were seen in tobacco and cigarettes (14.56%), books, magazines and newspapers (8.15%), fuel (7.23%) and drugs (6.16%).

The sharpest declines were observed in eggs (-25.23%), cheese (-1.43%), and beans (-1.28%). In the non-food sector, no significant decline has been observed except for room rates in the hospitality industry (-0.27%).

The average year-on-year growth in consumer prices in July 2009 – June 2010 – an important indicator in the nominal criteria for the accession to the euro area – dropped in June to 4.6%, from 4.8% in May, but the inflation rate based on the harmonized index of consumer prices fell to 4.6% from 4.7%.

The National Bank of Romania said it targets an inflation rate of 3.5% with +/-1% tolerance band for this year, but the latest statements of central bank officials point to an 8% inflation rate at year-end. In 2008, the National Bank of Romania missed its inflation target for the third time in a row.