BUCHAREST: Romania's annual inflation slowed to 5 percent on the year and was less than the market expected as volatile food prices rose at a lower pace, National Statistics Board data showed on Wednesday.
Governor Mugur Isarescu said the central bank faced a hard choice between helping a weak economy and raising interest rates to tackle fast inflation and anchor expectations. Its decision rested on how temporary the rise in inflation turns out to be.
Annual inflation slowed from September's 5.3 percent.
Earlier this month, the central bank forecast inflation at 5.1 percent at the year-end, sharply higher than its 2-4 percent target, driven largely by food prices.
Unlike neighbours Hungary, Poland and the Czech Republic - which have cut interest rates to help their economies - Romania has to keep a premium to maintain investor interest.
Consumer prices rose 0.3 percent on the month. Food prices were up 0.1 percent from September, while non-food prices and services rose 0.2 and 0.9 percent, respectively.
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