ECONOMY FINANCE&BANKING

Eurostat: Romania posts second highest Jan. 2018 annual inflation in EU

European Union annual inflation was 1.6 percent in January 2018, down from 1.7 percent in December 2017; the highest annual rates were recorded in Lithuania and Estonia (both 3.6 percent) and Romania (3.4 percent), according to data released on Friday by Eurostat, EU’s official statistics bureau.

Compared with December 2017, annual inflation fell in twenty-one member states, remained stable in one and rose in six, with Romania posting the highest increase of 3.4 percent.

Euro area annual inflation rate was 1.3 percent in January 2018, down from 1.4 percent in December 2017. In January 2017, the rate was 1.8 percent. The highest contribution to the annual euro area inflation rate came from services (+0.56 percentage point), followed by food, alcohol & tobacco (+0.39 pp), energy (+0.22 pp)

As far as Romania is concerned, data previously released by the National Institute of Statistics (INS) show that the annual inflation rate climbed to 4.3 percent in January 2018, from 3.3 percent in December 2017, amidst food prices rising 3.79 percent and non-food items 6.23 percent from January 2017. On the other hand, the prices for services advanced 0.9 percent from January 2017.

The National Bank of Romania (BNR) has upwardly revised its inflation forecast for the end of 2018 to 3.5 percent, from a previous 3.2 percent. At end-2019, inflation should stand at 3.1 percent.

According to BNR, the acceleration of the annual inflation rate in the first three quarters of 2018 is due to the components of the commodity bundle exogenous to monetary policy. The inflationary rebound fizzling.

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