The annual inflation rate, which measures the evolution of consumer prices in the last year, dropped to 4.56% in July this year, from 5.4% the month before, according to data from the National Statistics Institute (INS).

In July, food prices increased by 3.42% year-on-year while the prices of non-food products went up by 6.23% and those of services increased by 2.68%.

Compared to December 2017, the highest price increases were registered in July for air transport – 15.86%, natural gas – 10.43%, other vegetables and canned vegetables – 9.18%, fresh fruits – 6.88% and citrus fruits – 6.71%.

The central bank BNR expects the annual inflation rate to remain flat in the third quarter and start to decline in the last quarter.

The bank’s board decided on Monday, August 6, to keep the monetary policy rate unchanged at 2.5% per year. It also pumped some RON 10.5 billion (EUR 2.26 billion) in the market on Monday, buying state bonds from local banks, in the first repo operation this year.

The BNR board considers that the measures taken in the first part of this year, when they increased the monetary policy rate three times, from 1.75% per year to 2.5% per year, have successfully stopped the inflation rate increase.

Irina Marica, irina.marica@romania-insider.com