Analysts expect inflation in Romania to reach 6.2% by end of 2025

Analysts polled by British publication Reuters expect inflation to be at 5.6% year-on-year at the end of June, up from May's 5.45%. They also see inflation reaching 6.2% by the end of 2025, surpassing the central bank's forecast of 4.6%.

The higher inflation is driven by higher value-added tax and other levies that will take effect from August. The bank targets inflation at 1.5%-3.5% and will release new forecasts for this year and next in August.

All polled analysts expect the central bank to keep its benchmark interest rate on hold at 6.50% at its next meeting on July 8. The benchmark rate is seen at 6.25% at end-2025, although the risk that policymakers would stay on hold this year had risen, driven by the expected tax hikes.

Analysts expect the economy to grow 1.3% and 2.2% overall in 2025 and 2026, respectively.

In May, Romania’s central bank revised upward its inflation forecast to 5.1% at the end of the second quarter, citing the planned lifting of the energy price capping mechanism at the end of June 2025 and higher core inflation contributions. BNR also maintained that inflation will fall to 4.6% by the end of the year and 3.4% by the end of 2026.

(Photo source: Alexandru Marinescu | Dreamstime.com)