The 2014 inflation estimate was also lowered to 3.1%, from 3.3% initially.
“This is neither an optimistic nor a pessimistic projection. Considering the structure of the consumer price index, the decline could be even sharper than anticipated,” Isarescu said at the presentation of the bank’s quarterly inflation report.
Romania’s inflation rate rose slightly to 5.37% in June from 5.32% the month before, as a decline in food costs was not enough to offset higher prices in the non-food and services sectors.
“We estimate Romania’s inflation will stay at low levels, between 2% to 3.5%, but we don’t expect it to be as low as in other European countries,” Isarescu said.
The central bank’s chief said lower food prices could push the annual rate below 3% by year-end, including due to a recent cut in the bread sales tax to 9% from 24%. However, the effects will be only on a short term.
“Our data indicate that prices of volatile items have declined in July,” Isarescu said.
The July figures are due for release August 12.
The central bank targets an annual inflation rate of 2.5% in December 2013, plus/minus one percentage point around the band.