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Romania's annual inflation rate drops to 5.4pct in June


Romania's inflation rate stood at 5.4 percent in June 2018, slightly declining by 0.01 percentage points compared to the previous month (5.41 percent) due to a 3.86-percent increase in prices for food, a 7.82-percent increase in non-food prices and a 2.58-percent increase in service fees, according to the data published on Wednesday by the National Institute of Statistics (INS).

"In June 2018 compared to June 2017, the consumer prices increased by 5.4 percent. The annual rate calculated based on the harmonised index of consumer prices (HICP) is 4.7 percent. The average inflation rate over the past 12 months (July 2017 - June 2018) compared to the previous 12 months (July 2016 - June 2017), calculated on the CIP is 3.6 percent, while based on the HICP it stands at 2.9 percent," a release of the INS informs.

At the beginning of May, the National Bank of Romania (BNR) upwardly revised its inflation forecast for the end of this year to 3.6 percent. The previous forecast indicated a 3.5 percent inflation in 2018.

For the end of 2019, the BNR estimates an inflation rate of 3 percent, down 0.1 percentage points.


Two liberal members (PNL – oposition party) have criticized on Wednesday the decisions made by the Government, the ruling coalition, in regard to inflation, which was 5.4% in June, according to the latest figures released by the National Statistics Institute (INS).

PNL MEP Siegfried Muresan claims the PSD-ALDE Government is generating inflation as in Nigeria, up from 0.6% to 5.4%. “The Government has turned Romania’s economy into one of the most unstable ones in the region and one of the highest in the EU. (…) We witness an increase from 0.6% to 5.4%. This evolution in only 12 months brings Romania alongside Nigeria, known for the high inflation during the past years,” Muresan said.

He warned the main result is the fall in standard of living. Besides, high inflation leads to decrease in long-term investments.

“The business environment will invest less in long-term projects, due to uncertainty in terms of revenues. The consequence is that less investment means fewer jobs,” Siegfried Muresan said, adding that the inflation growth will not cease.

In turn, PNL Senator, Florin Citu , blames PSD leader Liviu Dragnea “and his clan” for wanting higher inflation to cut the purchasing power and to slow down an overheated economy. Citu says high inflation reduces the value of money the state has to return from loans and increases the budget revenues.

“The state, mainly the one currently led by Dragnea and his clan, wants higher inflation. High inflation cuts the purchasing power and slows down an overheated economy. More important for PSD is that high inflation reduces the value of money the state has to return from loans and ‘increases’ the budget revenues,” Florin Citu wrote on his Facebook page.

The PNL Senator warns that high inflation comes along with higher interest rates, depreciation of the national currency and crisis.

“This is why Dragnea’s and PSD’s messages about inflation are: ‘it’s OK, nobody has died due to the inflation rate of 6-7%. Look at the level in 2007!’ This is the way by which PSD is manipulating you to get used to increasing prices,” Citu wrote.