Romania’s inflation accelerated more than analysts’s forecast in January as rising electricity, tobacco and food costs outweighed a stronger currency that lowered services prices.
The inflation rate rose to 6 percent, the highest in 19 months, compared with 4.95 percent in December, the Bucharest- based National Statistics Institute said today. The figure exceeded the 5.4 percent median estimate of 15 economists surveyed by Bloomberg. Prices rose 1.3 percent from the previous month.
Romania’s central bank expects inflation to peak in the first half of this year because of higher energy prices, before slowing to the targeted band of 1.5 percent to 1.5 percent to 3.5 percent by the end of this year. Policy makers kept the benchmark interest rate unchanged at a record low this month because of the inflation spike.
“Romanian inflation for January likely continued to accelerate well above the central bank’s target; we see thus no room for monetary easing in the short run,” Szilvia Laszlo, an economist at DZ Bank AG, wrote in a note to clients today. “However, CPI growth is likely to decelerate in the second half, sliding close to the upper edge of the central bank’s target band.”
The leu traded at 4.4013 per euro at 9:53 a.m. in Bucharest, 0.1 percent weaker from yesterday’s close. It has gained 0.97 percent so far this year, the second-best performance among 25 emerging-market currencies tracked by Bloomberg, trailing the Brazilian real.
Growth in food costs quickened to 7.2 percent in January from a year earlier on higher vegetable and fruit prices, compared with 6.2 percent in December. Inflation for non-food items accelerated to 6.2 percent from 4.5 percent in December on rising electricity and tobacco prices, the institute said.
Service-price growth slowed to 3.1 percent from a year earlier, compared with 3.6 percent in December, as a stronger currency brought down phone, rent and transport prices gaged in euros, according to the statement.
-- With assistance from Barbara Sladkowska in Warsaw. Editors: Alan Crosby, Balazs Penz
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