Rising prices indicate ‘inflationary pressures’

Fuels, heat, fruits, vegetables and sugar are the products that have become the most expensive, according to the National Institute of Statistics.

However, representatives of the institution say, the annual inflation rate decreased, while the announced value is at least below seven percent from the previous estimated one of almost 8 percent.

Drawing the line, statisticians announced that in the month of January 2011 compared to December 2010, prices of food rose by 1.1 percent, the non-food goods by 0.8 percent, but the service charges fell, minus 0.1 percent.

The figures, provided by the INS, are higher than average estimated by analysts and reflect the action of significant inflationary pressures, the vice-president of Banking Financial Analysts Association of Romania, Nicolae Alexandru Chidesciuc, stated.

‘Although the annual inflation has fallen quite a bit in January compared to December, from 8 to 7 percent, practically, in reality, what can be noticed at a glance at the consumer cost structure is rather worrying. Why am I saying this? Because there can be noticed an extensive increase in food prices and practically, this increase is widespread. With the exception of meat, all other components have registered large increases.’

‘And at the same time, we can see significant increases in certain non-food components such as fuel, heat and books, newspapers, magazines. From my point of view, this indicates significant inflationary pressures also in the period ahead.’

‘Let's not forget that food prices are closely related to the agricultural year. The agricultural year was relatively weak in Romania. So basically, the crop year 2010-2011 will have an impact on prices until, perhaps, somewhere, at least at the level of June 2011 and at the same time we are confronted with strong increases in prices of main food commodities at international level, the analyst believes.’

The National Statistics Institute also announced the fact that since January, other shares are used to calculate the inflation, shares which are based on the monthly average expenditure per household, resulted from the family budget survey, conducted by the institute in 2009.

They recorded a slight decrease in the rate for non-food products and a slight increase in the services and food commodities, which, according to Nicolae Chidesciuc will lead to greater pressure towards higher inflation, as well as increasing the share prices of fuel and cigarettes.


Translated by: Iulia Florescu
MA Student, MTTLC, Bucharest University