Annual inflation was 2.04% in June

• Monthly inflation was negative

Last month, the annual inflation rate reached 2.04%, after reaching 1.79% in May, a new historic low, according to a press release of the National Statistics Institute (INS). The consumer price index fell 0.04% in June, over the previous month, according to the press release. The average price increase over the last twelve months, compared to July 2011-June 2012, was 3%. In the first half of the year, prices rose 1.65%.

The annual inflation rate was lower than the 2.1% estimated by analysts. The estimates varied between 1.7% and 2.4%, according to the answers in a poll made among the members of the Romanian Association of Financial and Banking Analysts.

Compared to the month of June last year, foodstuff prices fell almost 1%, (0.93%), whereas prices of non-food products increased almost 2.96%. The price of services increased almost 6%, according to the National Statistics Institute.

Compared to the month of May, services were the only segment which saw an increase in prices, of 0.27%, with the price of foods and non-foods products falling by 0.13%, or 0.1%, respectively.

The most significant price decrease compared to the previous month was seen in potatoes (over 20%), the press release says. The category "other vegetables and canned vegetables" has seen a drop of almost 2.5%. The other categories of foodstuffs experienced a fluctuation of less than +/-1% compared to the month of May, according to data from the National Statistics Institute.

Fuels are the only element of the non-food products category that saw their price decrease in June, compared to May (0.66%), whereas the rest of the products in that category increased slightly over 0.5%.

Telecom and auto and air transport have seen the highest price hikes among services.

For this year, the National Bank of Romania is forecasting an inflation rate of 3.2%, with a target set at 3%, with a fluctuation range of +/- one percent.