Inflation dropped unexpectedly in November

This is also the first time that annual growth of consumer prices was below the seven percent threshold in 2008. However, prices rose 0.32 percent in November compared to October. The evolution of inflation was below estimates by financial analysts, who initially forecast a 6.8-7.3 percent rise in consumer prices, and a 0.4-0.8 percent rise in the monthly growth rate of prices.

In spite of an exceptional agricultural year, prices of foodstuffs continued to surge, which could be explained by excess demand, according to Lucian Anghel, Chief Economist of Banca Comerciala Romana (BCR), the largest local lender in terms of assets.

The inflation target set by the National Bank of Romania (BNR) is 2.8-4.8 percent for 2008, and 2.5-4.5 percent for 2009. According to the latest forecast, BNR is expecting a 6.7 percent inflation rate at the end of 2008.