Romania recorded an annual inflation rate of -0.5% in December 2016, the figure being slightly below the central bank’s estimation of -0.4%, according to data presented on Friday by the National Statistics Institute (INS).

When compared to November, the consumer prices increased by 0.24% in December. The non-food products registered the highest month-on-month price increase in the last month of 2016, namely 0.3%, while the food prices went up 0.26%, on average. Meanwhile, the services got 0.08% more expensive.

The eggs registered the highest price increase in December when compared to November, of 6.89%. The vegetables and canned vegetables, excluding potatoes and beans, also got 2.43% more expensive, and so did the fuel – up 1.63%, and the potatoes – up 1.56%.

On the other hand, the biggest price decreases were registered by the citrus fruits – down 6.11%, and margarine – down 0.44%.

Year-on-year, the postal services recorded the highest price increase of 29.05%, followed by sugar – 10.15%, and citrus fruits – 3.37%. The steepest price decreases were reported for gas – down 7.7%, water, sewage, sanitation – down 7.5%, and electricity – down 6.3%.

The general VAT rate was reduced from 20% to 19% on January 1, 2017, one year after the VAT had seen a more significant cut from 24% to 20%. The lower VAT rate applies to non-food goods and services, as the VAT rate on food was lowered from 24% to 9% in June 2015.

In November last year, the annual inflation rate stood at -0.2%.

Irina Popescu, irina.popescu@romania-insider.com