Inflation in the first eight months reaches 7.3%

The inflationary rate progressed only 0.3 percentage points in August, so that the annualised rate was 14.2% compared with August last year.

This trend was due to the drop in foodstuffs prices, according to the data provided by the National Statistics Institute (INS). Inflation in July rose 1.2%, the highest level in five months.

Eight months through the year, the inflationary rate had reached 7.3%, while the authorities in Bucharest set a 14% full-year target for the increase in consumer prices.

The average monthly inflationary rate amounted to 0.9%, down 0.4% from 2002.

According to INS, foodstuffs prices shed 0.7% in August, with the sharpest declines registered by produce (19.9%), vegetables and canned vegetables (14.8%), as well as fruit and fruit preserves (12.1%).

These trends compensated for the increase in the prices of other foodstuffs, such as the milling and bakery products (4%), milk and dairy products (0.5%) or alcoholic beverages (1.9%).

Non-foodstuffs prices rose 0.6%. The highest price increases were those of the personal care products and cosmetics – 0.7%, fuels – 1.4%, as well as tobacco and cigarettes – 1.4%. Electrical power, thermal power and natural gas prices remained unchanged.

As for services, the positive price adjustment was of 2.1%. Postal and telecommunications services became 3.8% more expensive, while radio and TV subscriptions were 14.9% higher.

Analysts say the price increases this fall are threatening the 14% December to December inflationary target pursued by the Government and the National Bank of Romania.

Academy member Emilian Dobrescu estimates the inflation could reach about 15% by the end of the year, given the accumulation of a reserve (7%) in the first seven months, which should make sure any possible increase is not too high in the event inflation went beyond the target set. The authorities plan to push inflation down to a one-digit figure next year. razvan.voican@zf.ro