Romania’s inflation rate eases to 3.4% in October

Consumer prices in Romania advanced by 0.43% in October compared to September and by 3.4% compared to October 2018, the statistics office INS informed.

Food prices recorded faster advance, 0.7% compared to September and 4.2% compared to October 2018, but this is an effect of the relatively lower prices seen during the summer and autumn of 2018 amid better crops.

Non-food prices increased by only 2.6% year-on-year in October while the fees paid for services advanced by 4.1% yoy.

During the whole second half of 2018, food prices in Romania have increased slower than the overall inflation but started to catch up with the overall price trend once lower energy prices started to pull down the inflation more recently (since July this year).

Romania’s central bank has cut the inflation forecast for the end of this year to 3.8% (from 4.2%) and estimates an annual inflation rate of 3.1% for the end of next year (compared to 3.4% under the previous projection), National Bank of Romania (BNR) governor Mugur Isarescu announced last Friday, when he presented the quarterly report on inflation. According to the central bank, the annual inflation rate is anticipated to remain outside the 2.5%+/-1pp target range at the end of 2019, mainly under the impact of non-volatile shocks incurred during the first part of this year. But medium-term inflation expectations will remain elevated, anchored in the upper half of the target band.

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