Romania Jan CPI +0.86% On Mo, +7.26% On Yr

Inflation in January picked up the pace from December last year, when prices rose 0.64% on the month.  Average inflation was 5.1% in January.

The INS said food prices rose 9.71% on the year in January and 0.8% on the month, while prices for services were up 9.71% on the year as well and 2.12% on the month.

Non-food prices grew 4.19% on the year and 0.37% on the month in January, the INS said.

For 2008, the Romanian central bank has set an inflation target of 2.8%-4.8%. But analysts say prices might see double-digit growth this year, if Romania’s farming output is again hit by drought or floods.

Last week, the bank revised its yearend inflation forecast and said the country’s consumer price index will rise 5.9% this year, 1.6 percentage points more than its previous forecast.

It cited persistent inflationary shocks as the reason for the forecast revision. A spike in the inflation rate hit Romania in the second half of 2007, as the country’s CPI exceeded the central bank’s target band and accelerated to 6.57% at the end of last year, boosted by significant growth in food and services prices.