Romania November Inflation Unexpectedly Slows on Food, Oil Price

Romanian inflation unexpectedly slowed last month as food and energy prices fell.

Consumer prices rose 1.3 percent from a year earlier after growing 1.4 percent in October, the Bucharest-based National Statistics Institute said today. That’s less than the 1.6 percent median estimate of eight economists surveyed by Bloomberg. Prices fell 0.2 percent from the previous month.

The central bank lowered its 2014 inflation forecast to 1.5 percent from 2.2 percent on Nov. 4, citing lower energy prices and cheaper food imports from Poland amid a Russian ban. The rate will rise to 2.2 percent at end-2015, policy makers estimate. The bank targets price growth of 2.5 percent plus or minus one percentage point.

Food prices declined 0.03 percent from a year earlier in November after a 9 percent drop in vegetable prices and a 6 percent decrease in sugar, the institute said. Energy prices fell 2 percent, while service tariffs advanced 2.2 percent and non-food items increased 1.9 percent.

With economic growth exceeding estimates and inflation slower than forecast, policy makers will hold a monetary policy meeting on Jan. 7. They cut the key rate to a record-low 2.75 percent on Nov. 4. The central bank still has “leeway” for interest-rate cuts until inflation starts to accelerate in the second half of next year, board member Daniel Daianu said in a Nov. 24 interview.

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