The annual inflation rate remained stable at 2.1% in December last year as food prices rose by 3.24%, services by 2.69%, and non-food goods by 1.01%, according to data published on Thursday by the National Institute of Statistics (INS).
"Consumer prices in December 2020, compared to December 2019, increased by 2.1%. The annual rate calculated on the basis of the harmonized index of consumer prices (HICP) is 1.8%. The average rate of consumer prices in the last 12 months (January 2020 - December 2020) compared to the previous 12 months (January 2019 - December 2019), calculated on the basis of the the Consumer Price Index (CPI), is 2.6%. Determined on the basis of the HICP, the average rate is 2.3%," the INS press release informs.
The National Bank of Romania (BNR) estimated inflation of 2.1% at the end of 2020 and 2% in the third quarter of 2022, according to the Inflation Report.
"Following the publication of the August 2020 Report, some more significant disinflationary pressures, mainly induced by exogenous components of the consumer basket, have materialized in the segment of volatile food and fuel prices, respectively. In these conditions, the CPI annual inflation rate is expected to fall to 2.1% by the end of this year, a significant revision of 0.6 percentage points from the previous forecast. At the same time, under the impetus of the aggregate demand deficit in the economy and the gradual weakening of labor market resilience, more pronounced corrections will be reflected in the dynamics of the annual core inflation rate, which will reach 2% at the forecast horizon (Q3, 2022). By the end of next year, the current baseline scenario reconfirms the value from the previous projection for the annual CPI inflation rate (2.5%), while the forecast for the annual core inflation rate has been revised slightly downwards (by 0.1 percentage points, to 2.1%)," the report says.