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.