The annual inflation rate lowered to 5.86% in June because of cheaper food products

Inflation rose last month by 0.2% compared to the month of May, due to price increase in non-food products, while the annual rate decreased from 5.59% to 5.86%. Also, the National Bank of Romania (BNR) set a 3.55% inflation target for 2009 with a variation interval of one percent, and it estimates that the indicator will stop at 4.4% in December. The 0.18% foodstuff price drop in June was attributed to the price reduction in some base food products like cheese (-1.41%), eggs (-1.66%) and milk (-0.42%).

According to data published by the National Statistics Institute (NSI), in June, the biggest price increase was seen in the services segment recording a 0.43% advancement, in the conditions of a 1% undervaluation of the Romanian currency to the Euro.

Romania could take supplementary measures to reach the deficit quota negotiated in the agreement with the International Monetary Fund (IMF) and the EU, as the annual inflation rate of every trimester is a performance criteria. A two percent increase over the 4.5% quota established by the Fund could result in the annulment of the financing agreement with the European Commission.