Romania’s headline inflation accelerates slightly to 5.4% y/y in June

By bne IntelliNews July 11, 2013

Romania’s consumer price inflation accelerated marginally to 5.37% in June from 5.32% y/y in April, the country’s statistics office reported. This was more or less in line with the central bank’s 5.3% y/y projection.

No hikes in the administrated prices took place in the month. While natural gas price hikes in July and October plus the moderate weakening of the local currency will predictably put pressure on consumer prices later through the year, the good crop in agriculture is likely to offset these pressures and consolidate disinflation expectations. Subdued demand contributes essentially to the pattern.

Consumer prices increased by a mere 0.1% m/m in June alone. Nonetheless – the overall stability of the consumer prices in May was a result of a rather wide opposite variation of separate elements in the consumer basket. Food prices decreased seasonally by 0.72% m/m, while the services’ fees increased driven by the exchange rate variations by 0.88% m/m.  The non-food prices increased by 0.26% m/m – which is the equivalent of a 3.17% annual inflation.

Romania’s central bank has cut its end-year inflation forecast to 3.2% y/y under the latest Quarterly Inflation Outlook released on May 8, down from 3.5% y/y forecasted in February. Actual inflation will come within the targeted band at an earlier moment, probably in September, the monetary authority said.

  2010* 2011* 2012* Dec-12 Apr-13 May-13 Jun-13
CPI y/y 6.1% 5.8% 3.3% 4.95% 5.29% 5.32% 5.37%
Food 2.3% 6.0% 1.9% 6.21% 5.60% 6.39% 5.76%
Non-Food 9.8% 6.2% 3.8% 4.48% 5.80% 5.46% 5.84%
Services 4.8% 4.4% 5.1% 3.61% 3.48% 2.90% 3.53%
CORE2 5.7% 4.4% 2.8% 3.47% 3.59% 3.37% n.a.
Source: INS, *annual averages
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