Romania Inflation


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.

Consensus Forecast panelists expect consumer prices to drop 0.5% at the end of 2015, which is down 0.4 percentage points from last month’s forecast. For 2016, panelists forecast inflation of 0.1%, which is down 0.3 percentage points from last month’s Consensus.

Author: Teresa Kersting, Economist

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Romania Inflation Chart

Romania Inflation September 2015

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

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