Rental prices keep dropping in June

Rents fell in June for the third consecutive month this year, according to data provided by the National Institute of Statistics (INS) on the evolution of consumer prices.

Thus, rental prices slid 0.07 percent in June month-on-month. However, this drop is lower than those registered in April and May, when rents decreased 0.97 percent and 0.22 percent, respectively.

On the whole, consumer prices soared 5.86 percent in June compared to the same month of 2008 and 0.2 percent compared to May 2009. Such a low inflation rate has not been registered since August 2007, when the annual consumer price index was 4.96 percent. The reasons for which inflation fell in June include the decline in foodstuff prices and a slower increase in the prices of non-foodstuffs and services.

Generally, analysts said that the drop in demand led to a lower growth rate of prices or even to a decline in the prices of some products. But the evolution of the exchange rate and the higher prices of fuels kept the inflation rate high in June.

"The drop in inflation was in line with expectations. Main triggers were the price of fuel and the depreciation of the leu, without which we would have had a monthly inflation nearing zero. The price of foodstuffs is down, which means that aggregated demand is contracting," the Chief Economist of Raiffeisen Bank Romania, Ionut Dumitru, told NewsIn agency.

Economists said that disinflation will continue in the coming months, provided that the leu remains stable. "In the coming months, I believe that [inflation] will highly depend on the leu-euro exchange rate," said the Managing Partner of Macroanalitica, Laurian Lungu.

Business Standard