Romania Inflation July 2016

Romania

Romania: Annual drop in consumer prices deepens in July

August 10, 2016

In July, consumer prices dropped 0.2% over the previous month, which is in line with June’s reading. July’s result mainly reflected lower prices for non-food products, which more than offset higher prices for goods and services.

In annual terms, consumer prices recorded a 0.8% drop in July, which came in slightly below the 0.7% decline registered in June. Consumer prices had been following a downward trajectory since June 2015, mainly due to the reduction of the Value-added Tax (VAT) on food items and beverages that was implemented in June 2016 and a cut in the general VAT that has kept inflationary pressures muted. Inflation remains far below the Central Bank’s tolerance margin of plus/minus 1.0% around its 2.5% target. The annual average variation of consumer prices inched up from minus 2.0% to minus 1.9%.

FocusEconomics Consensus Forecast panelists see consumer prices falling 0.7% on average in 2016, which is up 0.2 percentage points from last month’s forecast. For 2017, panelists expect average inflation of 2.3%.


Author:, Economist

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Romania Inflation July 2016

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: National Institute of Statistics.


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