The annual inflation rate eased to 0.83% in December 2014, from 1.26% in the previous month, data from the country’s statistics institute INS showed Tuesday.
Consumer prices inched 0.1% lower in from November, due to a 0.5% drop in prices of non-food items. Both food and services prices were up 0.2%, the data showed.
However, compared with December 2013, the prices of food products went down 0.4%, while non-food and service prices were up 1.25% and 2.25%, respectively.
A good agricultural output helped keep prices of food products low for the second year in the row, while the decline of oil prices on international markets led to a significant decline in fuel prices, despite a new tax on fuel introduced earlier in the year.
According to the statistics institute, food prices were down 1.6% on average in 2014 compared with the previous year, but prices of non-food product went up 2.5% last year, while services were by 3.2% more expensive compared with 2013.
In the food sector, the largest price decreases in December compared with the same month of the previous year were registered by potatoes (-36%), sugar (-18%) and edible oils (-7.9%). On the other hand, prices of fish and dairy products went both up 1.3% on the year in December, while eggs and honey were 6.1% and, respectively, 8.2% more pricey. Prices of coffee and alcohol products were up more than 1%, mainly due to a rise in excise duties in 2014.
Prices of most non-food items went up in 2014, led by a 7.2% increase of tobacco prices, but they were partly offset by a 1.9% drop in fuel prices, backed up by a 2.3% decline of electricity tariffs.
In the services sector, prices of postal services went up 5.5% in December compared with the same month of 2013, and healthcare costs were 5% higher. Utility prices were up 3.8%, but telephony costs inched slightly lower compared with December 2013.
The 2013 inflation rate falls way below of the central bank’s target range of 1.5%-3.5%.
The bank said the annual rate would likely stay at historical lows in the first part of this year, but will re-enter its target interval in the second and third quarters of 2015.
At the end of 2013, Romania’s annual inflation rate was 1.55%.