Romania’s inflation rate rises to 2.8% in July

Romania's annual inflation rate accelerated in July by 0.2 percentage points compared to June, to 2.8%, based on the local methodology.

Under the harmonized HICP standards, the annual inflation went up by 0.3pp to 2.5%. Compared to June, the consumer prices remained on average at the same level.

In annual terms, food prices rose twice as fast as the overall index (+5.6%) despite the seasonal 0.45% decline in July compared to June.

Non-food prices edged up by 0.9% year-on-year dragged down by the low fuel prices. The fees paid for services recorded a 3% year-on-year growth, after lower levels in May and June.

Romania's National Bank (BNR), under its latest Quarterly Inflation Outlook, marginally lowered its forecast for headline inflation for the end of this year to 2.7% from 2.8% previously.

With this in mind, BNR cut the refinancing rate on August 5 to 1.5%. The move came after the call launched by finance minister Florin Citu for "negative interest rates," and some suspected more than a correlation.

Annual inflation will reach the center of the inflation targeting band (2.5%) at the end of 2021, according to BNR's projections.

(Photo: Nuthawut Somsuk/ Dreamstime)