The annual consumer price inflation in Romania eased slightly to 2.7% in August from 2.8% in July after the prices decreased on a seasonal trend by 0.05% in the month.

The negative monthly inflation in August resulted from less expensive potatoes (-6.6%) and fresh fruits (-7.2%). However, the average food prices were still 5.5% higher than one year ago, accelerating from a 5.1% year-on-year increase at the end of 2019.

This year, the main disinflationary driver has been energy (mainly fuel prices), which dragged down the average non-food prices to an annual increase of only 0.75% in August from 3.3% at the end of 2019.

The yearly increase in the average service prices remained constant at 3% in August from the same annual rate at the end of 2019.

Finance minister Florin Citu praised the Government's performance, stressing the decline of the headline inflation from 4.1% last August (during the Social Democrats' ruling) to only 2.7% this August, News.ro reported.

However, the food price inflation was only 3.1% last August (versus 5.5% this August) - not that the Government would be accountable for the adverse weather or higher transport cost of imported goods. The main driver of the fall in inflation in the past year has been the oil price, possibly accompanied by demand-side drivers.

iulian@romania-insider.com

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