Romanian Inflation Slows in April on Drop in Natural Gas Prices

Romanian inflation slowed in April as natural gas prices declined.

Consumer prices advanced 0.7 percent from a year earlier compared with 0.8 percent the previous month, the National Statistics Institute said Tuesday in an e-mailed statement. That matches the median estimate of 13 economists surveyed by Bloomberg. Prices rose 0.1 percent from March.

The central bank warned last week that Romania will probably experience temporary deflation this summer or autumn as the government cuts the value-added tax. Monetary-policy makers cut the benchmark interest rate to a record 1.75 percent on May 6, predicting 2015 inflation of 0.2 percent.

“The inflation decline compared to the previous month is mainly due to declines in gas prices,” Anca Jalea, a Bucharest-based economist at Raiffeisen Bank Romania SA said by e-mail.

The leu, which has strengthened 0.7 percent against the euro this year, weakened 0.1 percent to 4.4552 per euro at 9:25 a.m. in Bucharest, data compiled by Bloomberg showed.

Food prices rose 0.3 percent from the previous year in April, non-food prices added 0.5 percent and service costs jumped 1.7 percent, the institute said. Gas prices fell 3.7 percent. The central bank targets inflation of 2.5 percent, plus or minus 1 percentage point.