Romania's central bank forecasts that consumer prices will fall until spring next year after the government slashed the sales tax on food from 24 to 9 percent.
The National Bank of Romania said in a statement Tuesday the reduction in sales tax on food, which went into effect June 1, had sent the yearly inflation rate to minus 1.6 percent in June from 1.2 percent in May. The bank said inflation would resume later next year.
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Romanians spend about 30 percent of their income on food.
Parliament will take a break from its summer recess this month to vote on new government-backed tax cuts, which have been criticized by the central bank and the International Monetary Fund due to concerns about revenues.
Romania holds parliamentary elections in 2016.