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Romania’s ’07 Year-End CPI Exceeds Ctrl Bk Target, Ends At 6.57%

Romania’s consumer price index exceeded the central bank’s target band of 3-5% in 2007, accelerating to 6.57% at the end of December, due to a significant growth in food prices and services, the National Institute for Statistics said Friday.
Romania’s ’07 Year-End CPI Exceeds Ctrl Bk Target, Ends At 6.57%
11 ian. 2008, 10:25, English

Food prices in December saw a rampant 9.14% increase on the year, due mainly to the last year drought, which has affected a large part of the crops.

Prices in the services sector rose 8.55% on the year in December, as a result of higher prices for rents (+100,96%), railway transportation (+27.35%) and postal services (+23.26%).

In December alone, the index picked up 0.64%, a slowdown compared with November when inflation was 0.93%.

In 2006, inflation ended at 4.87% on the year in December, the central bank meeting its target for the first time since the fall of the communist regime in 1990.

For 2008, the central bank has set an inflation target of 2.8%-4.8%. But analysts say prices might grow in double digits this year, if Romania’s agricultural output will be again hit by drought or floods.

The central bank hiked the key monetary policy rate earlier this week by 50 basis points to 7.5% on the year, but analysts say the bank might hike it even further in its next monetary policy rate board meeting Feb. 4.