The increase in consumption prices in June stood at only 0.15%; one of the lowest levels lately, making the target of 5% inflation possible by yearend.
Therefore the annualised inflation (inflation over the last 12 months) reached 7.1% midway through the year. On the whole, food products became 0.5% cheaper in June, while non-food product prices went up by 0.5%. Service prices also rose by 0.8%, according to National Statistics Institute (INS).
Surprisingly, prices of spirits remained relatively unaffected by inflation in June, going up by only 2% instead of the 30% rise in price announced by association of spirits producers. The vice tax set for cigarettes and spirits in May made cigarettes 10-12% more expensive, while the prices of spirits rose by a mere 3% in the two months.
"The vice tax has already been absorbed by inflation without too much of an effect on the increase in cigarette and spirits prices," says Ion Ghizdeanu, chairman of the National Prognosis Commission. He believes the producers did feel the vice tax effect, but bore the increase in the excise tax without it showing too much in the sale price of the respective products.
After all, the 0.15% level of inflation in June is lower than initially estimated by the Commission. "For the time being, inflation is on schedule to meet the fluctuation interval allowed by the NBR," Ghizdeanu says.
The NBR set a 5% inflation target for this year that can be one percent higher or lower (4-6%). The 7.1% mid-year level of inflation, compared with 8.6% at the end of last year, means keeping the disinflation pace witnessed in the first half of the year can help contain the price increase within the target NBR set out to attain.
Highest rises in prices for food products in June were registered for fresh fruit (6%), potatoes (4%), spirits (2%). On the other hand, vegetables and canned vegetables dropped in price by 5.2% and so did fowl (2.2%), eggs (4.7%) and cheese (3.1%).
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