Annual inflation rate fell below 5% mark in August, down to 4.96%, according to data provided by the National Institute of Statistics. In July, the inflation rate fell to 5.06% month-on-month.

Consumer price index stood at 99.81% in August this year compared to a month earlier.

“Inflation rate fell higher-than-expected in August. Our forecasts had indicated stagnation or 0.1% decline. The inflation rate was largely weighed down by food prices”, Ionut Dumitru, senior economist of Raiffeisen Bank told Wall-Street.

Vegetable prices dropped 5.9% in August, while fruit prices fell 6.81%, according to the statistical report made public by NIS.

“Food prices will push inflation further down, but not at a similar pace. In a normal to good agricultural year, food prices have a major influence in the inflation rate”, said Ionut Dumitru.

Earlier this year, Raiffeisen Bank said the 2009 inflation rate was likely to come in at 4.5%, but didn’t exclude the possibility of a further decline.

The National Bank of Romania has lowered its 2009 inflation forecast from 4.4% to 4.3%, in its quarterly report on inflation released Thursday.