Rising food prices push up Romania’s annual inflation to 3.88 percent in August

Romanians saw food prices go up by 0.7 percent this August compared to the previous month while non food products were 0.5 percent more expensive, shows data released today by the National Institute of Statistics. The highest price hikes were reported for fresh and canned vegetables (+5.54 percent in August compared to the previous month) and fuels (+2.01 percent). The price of services has gone up by 0.1 percent.

Price increases this August have taken the annual inflation rate to 3.88 percent, the highest level so far this year. The central bank’s inflation rate target for 2012 is 3.2 percent, plus or minus one percentage point.

Food price have entered an upward trend this July rising by 0.14 percent against the previous month, after poor harvests caused by this year’s drought combined with the surge in international cereal prices, and the depreciation of the exchange rate put pressure on producers to hike prices.

Bancpost representatives told BR at that time that “while consumer prices reported a significant increase in July, the effect of the above mentioned factors has not been fully reflected. The evolution of the monthly inflation rate in July was mostly generated by external factors, especially the price of electricity. Therefore we expect prices to go up over the next months given the drought and the evolution of the oil price on external markets, which will be amplified by the leu’s depreciation against the euro”.

Simona Bazavan

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