Romania Inflation December 2015

Romania

Romania: Decline in consumer prices softens at the end of 2015

January 13, 2016

In December, consumer prices rose 0.1% over the previous month (November: +0.3% month-on-month), which marked a third consecutive month of rising 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 0.9% in December, which marked a softer drop than November’s 1.1% fall and the smallest decline since June 2015, when the food VAT was cut. Nevertheless, inflation closed 2015 far below the Central Bank’s tolerance margin of plus/minus 1.0% around its target of 2.5% target. On average, consumer prices fell 0.6% in annual terms in December (November: -0.5% year-on-year), marking yet another record-low.

Consensus Forecast panelists expect consumer prices to drop 0.2% at the end of 2016, which is unchanged from last month’s forecast. For 2017, panelists forecast inflation of 2.3%.


Author: Teresa Kersting, Economist

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Romania Inflation December 2015

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


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