Romania Inflation June 2016


Romania: Annual drop in consumer prices eases in June

July 11, 2016

In June, consumer prices dropped 0.2% over the previous month, which contrasted the 0.3% increase tallied in May. June’s result mainly reflected lower prices for food products which more than offset higher prices for goods and services. Consumer prices had been following a downward trajectory since June 2015, mainly resulting from the reduction of the value added tax (VAT) for food items and beverages since June and a cut in the general VAT that has kept inflationary pressures muted.

In annual terms, consumer prices recorded a 0.7% drop in June, which came in above the sharp 3.5% decline registered in May. June’s print marks the highest reading since May 2015. Despite June’s reading, inflation remains far below the Central Bank’s tolerance margin of plus/minus 1.0% around its 2.5% target. On average, consumer prices inched up from minus 2.1% to minus 2.0%.

FocusEconomics Consensus Forecast panelists see consumer prices falling 0.4% on average in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists expect average inflation of 2.4%.

Author: Jean-Philippe Pourcelot, Economist

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Romania Inflation Chart

Romania Inflation June 2016 1

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

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