Annual inflation rate reaches highest level in two years in Romania

The annual inflation rate in Romania, which measures the evolution of consumer prices in the last year, rose to 0.85% in June, the highest level in the last two years. Food prices dropped compared to the previous month whereas plane ticket prices increased for the second month in a row, according to the National Statistics Institute. In May, the annual inflation rate amounted to 0.64%. Consumer prices rose in June by an average of 0.04% compared to May. Food prices decreased by 0.18% on average in June over May whereas prices of non-food products went up by 0.07%. Service prices rose by 0.33% during this period. Compared to June 2016, food prices increased by 2.8% in June this year. The price of plane tickets went up by 3.9% in June over May, following an increase of 7.6% in May. This means that the plane ticket price rose by over 11% in the last two months. The general VAT rate dropped from 20% to 19% at the beginning of this year. The extra excise on fuel amounting to 7 euro cents per liter of fuel has been removed. The annual inflation rate reached -0.5% at the end of 2016. It was the second year in a row when the annual inflation rate recorded negative values. Romania’s National Bank estimates that the annual inflation rate will reach 1.6% at the end of this year. editor@romania-insider.com