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Romania inflation continues on upward trend in May, industrial output expanded

Staff Writer | June 14, 2018
Consumer prices in Romania jumped 0.5% in May over the previous month, matching April’s rise.
Europe   Consumer prices in Romania jumped 0.5%
Behind the increase were higher prices for non-food and food goods, as well as for services. The strongest increases were recorded for vegetables; and for fuels.

Inflation came in at a fresh multi-year high of 5.4% in May, up from 5.2% in April.

As a result, inflation moved further above the Central Bank’s target range of 1.5%–3.5%, where it has been for five consecutive months. Consequently, annual average inflation rose from 2.9% in April to 3.3% in May, the highest level since January 2014.

FocusEconomics Consensus Forecast panelists see inflation averaging 3.8% in 2018, which is unchanged from last month’s forecast. For 2019, panelists expect average inflation of 3.2%.

Industrial output expanded 3.6% in annual terms in April, accelerating from March’s subdued 1.2% growth rate—which had marked the lowest reading in almost one year.

According to the Statistical Institute, the expansion came on the back of solid growth in the manufacturing sector, while the electricity and gas, steam and air conditioning, and the mining and quarrying sectors contracted.

On a seasonally- and working-day adjusted month-on-month basis, industrial production increased 2.1% in April, following March’s revised 0.7% expansion (previously reported: +0.5% month-on-month).

Meanwhile, annual average growth in industrial production rose from March’s 7.4% to 7.7% in April.

FocusEconomics Consensus Forecast panelists expect industrial production to expand 4.6% in 2018, which is up 0.3 percentage points from last month’s estimate.

The panel predicts that industrial output will increase 3.9% in 2019.