Romania’s July CPI -0.07% MM, Annual Inflation Narrows To 5.06%

Analysts polled by Mediafax predicted a slowdown in the CPI growth of 0.1%-0.3% in July, on lower natural gas prices and a stable leu. The annual inflation was seen narrowing to 5.1%-5.2%.

This is the first decline in Romania’s monthly inflation since August 2008, when the CPI fell by 0.09 percentage points, and the third deflation report since the fall of the communist regime end 1989.

Food prices in July fell 0.5% from the previous month, while non-food prices and services were up 0.1% and 0.3% on the month, respectively.

The drop in food prices was mainly due to cheaper vegetables (-3.38%), fruit (-0.8%), edible oil (-2.74%) and dairy products (-0.28%).

The harmonized index of consumer prices, or HICP, stood at 6.6% at the end of July.

At the end of June, the annual inflation rate was at 5.86%.

Compared with the end of 2008, the consumer price index was up 3.07% in July. In the first seven months, service prices rose 5.10%, non-food prices increase by 4.29%, while the food prices grew by just 0.71%.

Romania’s central bank revised its forecast on the annual inflation rate in December to 4.3%, from 4.4% estimated in May.