Austrian group Erste, the majority stakeholder in the local lender BCR, has reduced its estimate on Romania’s annual inflation for December this year from 2.2% to 1.9%, as it expects a slower increase in food prices in the second part of the year.

“We continue to expect a rising inflation in the second half of the year, but the upward trajectory might be lighter than the previous estimates have shown, amid slower food price increases, especially on the volatile component,” according to Erste analysts.

In June, the annual inflation rate, which measures the evolution of consumer prices, increased to 0.85%, the highest level in the last two years, according to data published by the National Statistics Institute (INS) this week. Compared to June 2016, food prices rose last month by 2.8% whereas the prices of non-food products went up by 0.2%, and service prices dropped by 1%.

For 2018, the Erste analysts kept the inflation estimate at 2.9%.

editor@romania-insider.com