Annual inflation slows to 5.06% in July

Annual inflation rate fell to 5.06% in July in line with forecasts, while consumer prices fell 0.07% compared to June, on food price drop and steady evolution of non-food and service prices, according to data provided by the National Institute of Statistics.
The country’s annual inflation rate is the lowest since August 2007, when consumer price index stood at 4.96%.

In June, the annual inflation rate was 5.86%.

Consumer prices fell in July by 0.07% as prices for food dropped 0.5%, for non-food increased by 0.14% and services tariffs climbed 0.32% in average, data from NIS show.

In the Romanian consumers’ shopping cart, foodstuff accounts for 37.58%, non-food product 44.05% and services 18.37%.

Separately, tobacco and cigarettes prices surged 2.86%, water and sanitation 1.41%.

Generally, food prices increased slightly or dropped, according to NIS. Honey, potatoes and beer are the only food products whose prices advanced more, by 0.60%, 0.49% and 0.22% respectively. Prices of vegetables and canned vegetables dropped the most, by 3.38%, followed by oil – 2.74%.

As for non-food products, fuel prices went up 0.72% in July, while natural gas dropped 5.08% and medicines by 0.02%.

In terms of services, rents increased in average by 0.04% in July, and 2.73% year-to-date. Urban transportation was 0.34% more expensive in July, while the radio and TV subscriptions increased by 0.24% and air transportation and phone subscription by 0.12% each.

National Bank of Romania hopes to contain this year’s inflation rate in the range of 3.5% plus/minus 1 tolerance band. In its latest inflation projection, the central bank’s target for the full year was at 4.3%, slightly revised downward from prior target. International Monetary Fund has set its inflation target for Romania at 4.3% for end-2009.

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