Consumer prices rose faster than wages in Romania in Q4

The average net wage in Romania increased by 6.7% in the fourth quarter (Q4) last year compared to the same period of 2020, to RON 3,689 (EUR 746), according to the statistics office INS. In euros, the wages rose by 5% YoY.

In real terms, due to the high inflation in the quarter (8.0% YoY), the salaries contracted by 1.2% YoY.

Compared to the last quarter of 2019, before the Covid crisis, however, the wages maintain still a 4% (2% per annum) advance in real terms.

The high inflation rates prevailing during the entire year will generate nominal wage hikes across all industries (to a lesser extent in the budgetary sector) but keeping pace with the consumer prices remains unlikely. In the medium-term, however, the macroeconomic fundamentals support the catching up and returning to robust positive real growth rates.

Economic expansion rates of over 4% per annum are in line with projections from major IFIs is going to be the main driver.

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