Romania: Consumer prices in September record large annual drop on reduced VAT for food items
October 12, 2015
In September, consumer prices rose 0.3% over the previous month, which contrasted August’s 0.5% decline, which marked the first month-on-month increase after three months with falling prices. Consumer prices had been falling in monthly terms since June, mainly resulting from the reduction of the value-added-tax (VAT) for food items and beverages from 24% to 9% on 1 June.
In annual terms, consumer prices declined 1.7% in September, which marked a slightly softer drop than August’s 1.9% fall, which had marked the steepest decline on record. As a result, in September inflation remained far below the Central Bank’s tolerance margin of plus/minus 1.0% around its target of 2.5% target. Annual average inflation eased from August’s 0.3% to a flat reading in September, marking yet another all-time low.