Inflation in Romania erodes real wages by 4.5% in June-November

The average net wage in Romania, expressed in real terms, plunged by 7.2% in July-August when the consumer prices jumped by 4.8% and then recovered by 2.9% in September-November after the consumer prices stabilised (rose by only +1.3%), according to data published by the statistics office INS on January 16. Overall, the real average wage in Romania was, as of November, 4.5% lower than in June – before the price shock prompted by the electricity price liberalisation and the VAT rate hike – and was slightly rising.

The subsequent household income correction was visible in the volume of retail sales, which contracted by 3%-4% compared to the period before the price shock in July-August.