12 May 2008 Bucharest _ April’s inflation rate was 8.62 percent year-on-year, a slight drop from the month before.
This is according to Romania’s National Statistics Institute which said inflation was 8.63 percent at the end of March, the highest in the last two years.
The rate of inflation was due to rising food prices, which climbed 11.44% from April 2007, while services were 10.42% more expensive.
Inflation in the first four months of this year rose to 2.78 percent from 2.25 percent.
This value of inflation was predicted by analysts, who forecast a massive hike in food prices compared to the year before.
”Still, the national currency, the Lei, had a 2 percent better exchange rate in April than the month before, so it would compensate the negative influence of food and services prices,” said Nicolae Alexandru-Chisdeciuc, senior economist at ING Bank.
In August, inflation will decrease but it will depend on this year’s agricultural yield, Romanian Commercial Bank analyst, Lucian Anghel, pointed out.
Last week, Romania’s Central Bank upped this year’s inflation rate to six percent from an earlier forecast of 5.9 percent.
This hike was due to the Romanian Central Bank’s, BNR, expectations of rising fuel prices in the coming months but also due to higher wages that will surpass labour productivity, bank Governor Mugur Isarescu said.
It was the second time this year that BNR has raised its inflation forecast for 2008, since in February it was notched up by 1.6 percent from the previous prediction. Read more: http://balkaninsight.com/en/main/news/7755
Last year, the inflation rate was 6.57 percent caused by rising food and fuel prices and by a poor harvest, due to the drought in the summer.