Romanian July Inflation 9.04% On Yr, Hits 3-Yr High

Romanian analysts and officials have widely expected inflation to exceed 9% in July.

“I expect inflation to exceed 9.1% in July, and then return on a descending path,” central bank governor Mugur Isarescu said in a press conference last week.

In July alone, the inflation was the result of a 2.31% increase in non-food products, of which prices for electric power rose by 4.51% while gas prices were up 12.53% on the month.

Prices for food products and services have decreased in July, by 0.68% and 0.3% on the month, respectively.

Of food products, prices for potatoes saw a 12.73% decline, vegetables saw their prices fall by 6.38% while prices for fresh fruits were down 11.22% on the month.

Last week, the central bank has revised upwards its inflation projections for 2008 and 2009, citing pressures from a rampant economic growth but also from wage increases and expected pension increases.

The bank sees inflation at 6.6% at the end of this year and at 4.2% at the end of 2009, compared to a target of 2.8%-4.8% and 2.5%-4.5% for 2008 and for next year, respectively.