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Romania ranked top for inflation among EU member states

posted onFebruary 25, 2019
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Romania recorded the highest annual inflation rate among EU member states in January 2019, according to figures published on 22 February by Eurostat.

The EU statistical office said the euro area annual inflation rate was 1.4% in January 2019, down from 1.5% in December. A year earlier, the rate was 1.3%. EU annual inflation was 1.5% in January 2019, down from 1.6% in December. A year earlier, the rate stood at 1.6% 

Compared with December 2018, annual inflation fell in sixteen Member States, remained stable in five and rose in seven. The highest annual rates were recorded in Romania (3.2%), Latvia (2.9%), Estonia and Hungary (both 2.8%).The lowest annual rates were registered in Greece (0.5%), Croatia and Portugal (both 0.6%) .

In January 2019, the highest contribution to the annual euro area inflation rate came from services (+0.70 percentage points, pp), followed by food, alcohol & tobacco (+0.36 pp), energy (+0.26 pp) and non-energy industrial goods (+0.06 pp), Eurostat said.

Romania Inflation January 2019

The Harmonised Indices of Consumer Prices (HICP) used by Eurostat are designed for international comparisons of consumer price inflation and measure price with a unified basket of consumer products and services for the 28 member states.

But the Romanian basket of consumer products and services, which includes a higher percentage of food products, shows a slightly different picture.

Romania's National Institute of Statistics (INS) data released on 13 February, showed the country's annual inflation rate stood at 3.3 percent in January 2019, unchanged from the previous month's 12-month low.

Cost slowed for non-food products (3.3 percent vs 3.8 percent in December). It rose faster for both food (3.8 percent vs 3.1 percent) and services (2.7 percent vs 2.4 percent),  as the Romanian currency's depreciation refuelled price increases in imported goods and some services.

On a monthly basis, consumer prices were up 0.8 percent in January 2019 compared to December 2018. 

Meanwhile, the National Bank of Romania (BNR) sees inflation declining in the first three quarters of 2019. 

“During the discussions regarding future developments, Board members showed that the new anticipated pattern of inflation was quasi-similar to that indicated by the forecast published in the November 2018 Inflation Report. Specifically, the annual inflation rate would probably decline further during the first three quarters, to values even slightly below the previously expected ones, before climbing and remaining on a higher path, yet beneath the upper bound of the target band, to reach 3.0 percent in December 2019 and 3.1 percent at the end of the forecast horizon, i.e. almost identical to the previously forecasted levels” the bank said in the minutes of the 7 February policy meeting. 

According to Trading Economics, Romanian inflation averaged 44.20 percent from 1991 until 2019, reaching an all time high of 316.90 percent in November 1993 and a record low of -3.50 percent in May 2016.

UPDATE 14/05/2019

Romania's annual inflation rate increased by 4.1% in April, from 4% in the previous month, the National Statistics Institute (INS) said on Monday. 

Food prices advanced 4.98% year-on-year in April, non-food prices increased 3.66%, while prices of services grew by 3.83% in April.

"April 2019 consumer prices increased by 4.1pct from April 2018. Y-o-y rate based on the Harmonised Index of Consumer Prices (HICP) was 4.4pct. The average consumer price rate in the last 12 months (May 2018 - April 2019) compared with the previous 12 months (May 2017 - April 2018), based on the CPI was 4.3pct, while based on HICP, the average rate was 4.1pct," INS said in a statement.