Romania’s industrial inflation turns negative in June dragged by energy prices

Industrial price inflation in Romania turned negative -0.3% y/y in June, dragged down by the prices of energy that have constantly dropped from February to reach a negative -7.5% y/y annual contraction in June, according to data published by the statistics office INS.

The industrial prices were largely shaped over the past years by the cost of energy, which soared in 2021-2022 to further correct downwards and stabilise over the past couple of years. The average price of energy has actually decreased by 4.4% over the past three years, after it soared by 176% over the previous three-year period.

In manufacturing, the prices have increased by only 3.3% over the past three years and by 2.2% over the past year.

However, the prices have diverged when it comes to particular categories of goods.

The non-durable consumer goods saw the steepest increase, 21% over the past three years and +5.7% over the past year. The robust private demand and the end-user prices absorbing the previous surge in energy prices have visibly contributed. The prices of durable consumer goods rose at a slower rate: by 12.7% over the past three years and +3.0% y/y, in line with the local currency’s stable exchange rate visible in the prices of tradeable goods.

The prices of capital goods increased by 15.2% over the past three years but only by 2.3% over the past year.

As regards the prices of intermediary goods, which provide an indication of the inflationary pressures on the supply side, they have increased by 2.9% y/y (slower than the prices of consumer goods) while remaining 1.7% lower compared to three years ago – pointing to no supply-side inflationary pressures.

(Photo source: Arlawka Aungtun/Dreamstime.com)