Romania's annual inflation slows to 3.66 percent in March, trade deficit expands

Romania's annual inflation slowed to a post-communist low of 3.66 in March, the National Statistics Institute said Wednesday.

Romania is on track to cut its inflation to between 3 percent and 5 percent this year, with the consumer price index reaching 0.07 percent in March, and 0.31 percent since the beginning of the year.

The country's trade deficit grew by 83 percent in the first two months of 2007 compared to the same period last year, to €2.56 billion (US$3.44 billion), on higher imports from the European Union, which Romania joined in January. Exports were up 12.5 percent, reaching €4.36 billion (US$5.85 billion), but imports grew by 31.3 percent.

The rise in imports was due to the continued appreciation in real terms of the Romanian currency, the leu, strong domestic demand and the removal of trade barriers after the country joined the EU. In January, Romania also aligned its tariffs for non-EU countries with those of the EU, which were generally lower.

The International Monetary Fund has urged the government to tighten public spending to keep its current account deficit under control and cut inflation.

iht.com