Romania CPI slows in June, trade gap narrows

BUCHAREST: Romania's annual inflation slowed to 7.9 percent in June, below market expectations, from May's 8.4 percent, while the trade deficit narrowed further, data showed on Monday.

Inflation was expected to tick up in June due to a weakening leu versus the euro, as concerns over the impact on the banking sector from the Greek debt crisis sent the unit to its lowest level in more than five months.

But data showed prices fell on the month in June due to a step decrease in food prices, with vegetables falling by 11 percent and milk products edging down.

A Reuters poll of 16 analysts had forecast prices to rise to 8.5 percent on the year in June, and central bank officials had also expected inflation to peak in June.

The central bank targets inflation at 2-4 percent this year and next, and its latest end-2010 forecast for price growth is 5.1 percent for end-2011.

Romania's central bank kept rates on hold at a record low of 6.25 percent at its June 29 meeting and said inflation outlook still showed significant risks which would require a further prudent monetary policy stance.

Data also showed the five-month trade deficit narrowed 7.5 percent on the year to 3.6 billion euros, as exports' growth rate outpaced imports.

Copyright Reuters, 2011