NEW YORK: December inflation in Romania slowed more than expected with declining food and energy costs leaving price growth short of the central bank’s 2014 target.
The inflation rate fell to 0.8 percent from 1.3 percent in November, the Bucharest-based National Statistics Institute said today in an e-mailed statement. Prices fell 0.1 percent from the previous month.
Policy makers, who target inflation of 2.5 percent plus or minus one percentage point, trimmed their benchmark interest rate to a record 2.5 percent on Jan. 7 as nations across Europe fret about the threat of falling prices.
There’s a risk deflation expectations will take hold in the European Union, central bank Governor Mugur Isarescu said after the decision. He said he’s prepared for the likelihood Romanian price growth stays below target in the next few months.
Food prices declined 0.4 percent from a year earlier in December, prompted by a 6 percent drop in vegetable prices and an 18 percent decrease in sugar, the institute said. Fuel prices fell 2 percent, while service tariffs advanced 2.2 percent.
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