Monthly inflation in Romania fell slightly in July 2011-08-15

Inflation stood at 4.85 per cent last month, down from 7.90 per cent in June and the lowest rate since June 2010, official data has shown.

Annual inflation is expected to come down further in 2012, declining to approximately 3.5 per cent. Meanwhile, it is only marginally above the central bank’s upper target of 4.5 per cent.

The latest figures come one week after members of the EC and IMF visited Bucharest to review the country’s economic performance. The team concluded that Romania’s economic growth programme was on track and the country was expected to grow by between 3.5 per cent and 4 per cent in 2012.

However, Romanian analysts continue to take a cautious view of the country's growth prospects.

Bucharest-based independent economic analyst Ilie Serbanescu told Balkan Insight more needed to be done so as to lift Romania out of a recession.

“The lower inflation rate may have positive effects by encouraging optimism and accelerating consumption,” said Serbanescu. But he indicated that “the improvement has come at the cost of reducing investments and public spending.”

Recent polls reflect public concern over the state of the country’s finances. Results show that Romanians continue to be worried about inflation and a large proportion are not convinced that the economic revival in some areas of the world will be a long-term one.