Romania's inflation rate was the lowest since 1990 in August

Romania's annual inflation rate dropped to its lowest since 1990 in August and monthly consumer prices fell for the first time in more than 16 years on lower food costs. The inflation rate fell to 6% in August from 6.2% in July, the National Statistics Institute said today in an e-mailed statement in Bucharest. Consumer prices fell almost 0.1% in August from July. The median estimate of six economists surveyed by Bloomberg Sept. 7-8 was for a 0.2% monthly increase and an annual rate of 6.2%. „The unexpectedly-low inflation rate in August makes room for the annual inflation rate target to be met,” ABN Amro Bank Romania head of research Radu Craciun said yesterday in a phone interview. „A new increase of the benchmark rate by the central bank is therefore becoming unlikely.” Romania and Bulgaria aim to join the EU on Jan. 1.The cost of food items fell 0.9% in the month, pulled down by fruit prices, which fell almost 15%, as well as by the price of canned vegetables and sugar, which dropped 11.4% and 1.4%, respectively, the institute said. Non-food prices rose 0.3%, mainly as the price of tobacco products increased by 1.2% and fuel prices gained 0.7%. The cost of services rose a monthly 0.7% as phone tariffs gained 1.8% and rents advanced 1.3%. Slowing inflation persuaded Romania's central bank on Aug. 9 to leave its benchmark interest rate unchanged at 8.75%. The central bank targets an inflation rate of 5% plus or minus one percentage point for the end of this year. (Bloomberg)