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Romanian October inflation drops to 4.8%, lowest in 17 years

Romania's annual inflation rate dropped in October to the lowest since the start of 1990 as the costs of food products rose less than expected.

The rate fell to 4.8% from 5.5% in September, the National Statistics Institute said today in an e-mailed statement in Bucharest. Consumer prices rose 0.2% in October, after having gained 0.05% in September. The median estimate of six economists surveyed by Bloomberg was for a 0.4% monthly increase and an annual rate of 5%. Romania had the highest inflation rate at the beginning of this year among European Union candidates, including Croatia, Bulgaria and Turkey. Inflation eased in September to the slowest since Communist rule ended 16 years ago. The central bank, which will decide later today whether to change its benchmark rate, must control consumer-price growth as the country prepares to join the European Union on January 1. The bank's benchmark interest rate is 8.75%. The cost of food items rose 0.05% in October, following a 0.7% decrease in September. The cost of services rose the most in the month, by 0.9%, as rents rose 2% and other public services tariffs gained almost 3%. Non-food prices rose 0.07% driven by the price of tobacco products, which increased 0.7%. (Bloomberg)