Romania Inflation Rises To 2.04% In June

07.10.2012 By Florentina Dragu

The Romanian consumer price index was unchanged on the month in June, but the annual inflation accelerated to 2.04%, ending a seven-month slowdown, the statistics institute INS said Tuesday.

In May, the annual rate fell to an all-time low of 1.79%.

Analysts estimated the annual inflation would come in at 2.1% in June. The central bank left its key rate unchanged for a second straight time last month, as tensions in the eurozone and political upheaval at home called for a more prudent monetary stance.

The national currency also took a severe hit recently and fell to historic lows against the euro after a power grab from the ruling coalition led to the President's suspension, raising concerns about the country's ability to meet its fiscal and economic targets under a EUR5 billion international loan.

Food and non-food items were 0.1% cheaper in June from a month earlier, but prices in the service sector inched up 0.3% on the month, INS data showed.

Romanians paid by 5% less for fresh and canned vegetables in June compared with May, while the cost of dairy products inched down 0.13%. However, the price of fresh fruit went up 6.5% on the month in June.

In the non-food sector, fuel prices declined 0.66% in June from the previous month, the data showed. Postal and telecom services were 0.4% costlier on the month, while other services rose 1.32%.

Romania's harmonized index of consumer prices, or HICP, fell slightly to 3.1% at the end of June, from 3.5% the month before.

The central bank targets an annual inflation of 3% at the end of 2012, plus/minus one percentage point around the band. The bank estimates the annual rate will peak to 3.8% in September before stabilizing at around 3% in the fourth quarter.