Lower food prices decrease inflation

The annual inflation rate fell to 4.85 percent after consumer prices had decreased in July for the second consecutive month.

The announcement was made on Wednesday morning by the National Institute of Statistics after the Central Bank has recently revised the inflation forecast downward for this year.

A total price decrease of 0.35 percent has been driven by the lower food prices, particularly vegetables and fruit prices, of about two percent.

However, a price increasing has been registered in non-food goods, particularly tobacco and services, respectively transport, water and sanitation and telephony.

From the beginning of this year prices have increased with 2.39 percent.

Experts explain that the decrease of the annual inflation rate has been also brought about by the elimination of the base-effect in July 2010, at which time the value added tax was increased to 24 percent.

The Central Bank has recently revised the inflation forecast for this year which decreased from 5.1 percent to 4.6 percent, and also the forecast for 2012 from 3.6 percent to 3.5 percent.

Translated by: Cătălina Virvescu
MA Student, MTTLC, Bucharest University