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December 9, 2021

YOY inflation rate remains negative in July at minus 1.7pct, new historic low in past 25 years

The year-on-year (YOY)  inflation rate remained negative in July, at minus 1.7pct, down from minus 1.6pct in the previous month, whilst monthly inflation reached 0.17pct, according to the data released on Tuesday by the National Institute of Statistics (INS).

Consumer prices in July 2015 compared to July 2014 were lower by 1.7pct, as measured by the consumer price index (CPI), and by 1.4pct, measured through the harmonised index of consumer prices (HICP), the INS informs.

In July 2015, the share of the goods and services that saw a decrease in prices compared with July 2014 was 40.0pct, and those that recorded price increases between 0 and 2.5pct had a share of 34.5 pct. The goods and services having recorded higher prices by over 2.5pct accounted for 25.5pct.

The average rise in consumer prices in the last 12 months (August 2014 to July 2015) compared to the previous 12 months (August 2013 to July 2014), based on the CPI is 0.5pct; based on the HICP, the rise is 0.7pct.

As of June 1, the reduced VAT rate of 9pct was extended from bread to all agri-food stuff, including non-alcoholic beverages.

The National Bank of Romania (BNR, the central bank) has revised downwards its inflation forecast for the current year; inflation is expected to be negative over the following three quarters, and to return to positive figures afterwards, BNR Governor Mugur Isarescu told an August 4 press conference. He said that, according to the BNR estimates, inflation would remain below the minimum variation range [1.5pct] until early 2017.

According to Isarescu, however, Romania will not see deflation, because consumption advanced by 6pct and might reach 10pct by the year’s end.

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