Consumer prices fell by 0.1 pc in December. Annual inflation rate hit the lowest level since 1970

The consumer prices dropped by 0.1 percent on last year’s December compared to November, due to non-food goods cheapening by 0.5 percent and slightly higher prices for food and services so that the annual rate fell to a record low of 0.83 percent. Also the average prices increase for the whole year reached 1.1 percent, according to Romanian National Institute of Statistics (INS) data released on Tuesday. Consumer goods price hikes in 2014 reached a historical low, inflation rate reaching 1.4 percent, the lowest threshold in the last years since 1970.

„It is a low level for a long period of Romanian history and this is a problem. A second problem is that the European countries are facing deflation and I think we have to be very careful because Romania needs everything, but not deflation,” according to the advisor of the governor of National Bank of Romania (BNR), Adrian Vasilescu, Romania TV informs.

In December 2014 against the previous month, the food good prices and the tariffs for services increased by 0.2 percent, namely 0.3 percent, while non-food prices dropped by 0.5 percent.

The most significant decrease of prices of 7.6 percent was recorded at “citruses and other southern fruits” and the biggest price increase was recorded at “other vegetables and tinned vegetables, 5.73 percent. The biggest price cuts were recorded in 2014 at potatoes, sugar and vegetables. At the same time, honey, beans and natural gas have achieved the greatest increases.

On November, BNR has reduced the inflation forecast from 2.2 percent to 1.5 percent for 2014 and from 3 percent to 2.2 percent in 2015, down 0.7 percentage points, respectively 0, 8 percentage below those projected in August.