Annual inflation in Romania hikes 7.26% in January y/y, hits 20-month record

Inflation in Romania rose 7.26 percent in January year-on-year owing to an increase of tariffs for services and on hiking food stuff prices, the country's statistics body INS shows.

Inflation last month almost beat analysts' estimates which placed the consumer price index at 6.9 - 7.3 percent, after incisive increase of prices for food, following several other hikes of costs and tariffs. Basic foodstuff was 9.71 percent more expensive in January 2008 versus the year before, INS showed.

Monthly inflation in January stood at 0.86 percent, after a monthly 0.80 percent increase of prices for food spurred by a 2 percent growth of fruit and vegetable prices and a 2.12 percent hike of tariffs for services, among which postal services rose the most (10.87 percent), followed by air transportation (4.43 percent) and telephone services (4.38 percent).

However, eggs, sugar and medicine cheapened a bit month-on-month in January this year.

Analysts NewsIn interviewed had forecast that the leu's drop in January would influence tariffs and prices set in other currencies, especially those calculated in euros, mostly practiced by mobile phone companies.

Romania's currency lost 4.65 percent throughout January, from 3.5289 against the euro, to 3.6930.

The wide inflation in January casts a shadow of doubt the central bank's 3.8 percent target for this year can be real. The lender's governor announced the inflation target will not be modified. "We must fight to keep inflation low," he said.

NewsIn