Annual inflation dropped to 5.95% in May, the lowest level in the last 21 months 

The annual inflation rate dropped from 6.45% in April to 5.95% in May, according to the estimates: the food sold slightly cheaper and the price increase for goods and services was moderate, according to Romania’s National Institute of Statistics (INS) latest data, published by Romanian press agency NewsIn.

A recent lower inflation level has only been recorded in August 2007 – 4.96. The estimates saw the inflation rate close to 6% in May, presumption backed by a low price growth of 0% to 0.2%.

INS data show that prices for general goods increased in May with 0.01% against the prices in April. Food prices dropped 0.05%, general goods are 0.03% more expensive and services cost now 0.11% more.

Since the beginning of this year, Romanians shopped mostly for food – 37.58%, general goods – 44.05% and paid for services – 18.37%.

The most significant increase in prices was seen by fresh fruit – 2.31%, vegetables – 2.02% and honey – 1.25%. General goods, cars and car parts prices continued to drop in May with 0.26%, gas is now 2.57% cheaper and electricity costs 0.89% less. In terms of services, rents dropped with a medium 0.22% against April, but are 2.77% more expensive against December.

The increase in prices for May 2008 – April 2009 decreased to 7.2% from a previous 7.4%.

Romanian Central Bank (BNR) aims for 3.5% inflation this year, +/- one percent, but the latest estimates indicate 4.4% inflation by the end of this year. BNR also downgraded estimates for next year’s inflation from 3.2% to 2.8%.

IMF head of Mission for Romania said end of March that it was crucial for Romania that the inflation drops back to the rate previously aimed by BNR, which needs to keep it fairly stable for the coming years.