Romania's Inflation Rate Will Stay Low In 2015 As Well

04.01.2015 ZF English

Romania’s inflation fell in 2014 to the lowest level in 30 years, amid the declining trend of oil prices, a good farming output and subdued domestic demand.

The annual inflation rate eased to 0.83% in December 2014, from 1.26% in the previous month, ad the trend continued in the first months of 2015 as well.

In 2014, a good agricultural output helped keep prices of food products low for the second year in the row, while the decline of oil prices on international markets led to a significant decline in fuel prices, despite a new tax on fuel introduced earlier in the year.

The inflation rate fell way below of the central bank's target range of 1.5%-3.5%.

The bank said the annual rate would likely stay at historical lows in the first part of this year, but will re-enter its target interval in the second and third quarters of 2015.

However, the bank lowered its year-end projection of the inflation rate to 2.1% in 2015, from 2.2% seen previously, but it may soon cut down its forecast after the government announced a reduction in the value-added tax rate for all food products to 9% from 24% starting June. Analysts already predicted the inflation may turn negative by the end of the year.