Romania's inflation edged up to 8.5% in February

The headline consumer price inflation in Romania rose to 8.55% YoY in February, from 8.35% YoY in January and 8.19% YoY in December, the statistics office INS announced.

The prices edged up by 0.6% in February alone. By main categories of goods, the prices of food goods increased by 8.8% YoY and the prices of non-food goods by 9.3% YoY dragged up by the prices of fuels (27.4% up YoY) and natural gas (+45% YoY).

The statistics office specifies that the rise of the natural gas price is calculated by considering only the end-user price, capped and subsidised by the Government.

Under the same procedure, the electricity price has actually decreased by over 8% YoY as of February, INS claims.

Finally, the fees paid for services increased by only 6.1% YoY as of February.

Consumer price inflation is expected to peak at 11.2% in April, once the support schemes for household users of electricity and natural gas have expired, and will remain close to double-digits at the end of the year (9.6%), under the baseline inflation scenario unveiled by the National Bank of Romania (BNR).

Later, however, inflation will subside quickly and enter the target inflation band at the end of 2023, the central bank expects.

Tough times are ahead of us, and the cost of living will rise, economist Laurian Lungu said, commenting on the latest consumer price figures.

"I do not see the salary increases keeping pace with inflation. However, the CPI inflation of 8.5% is [as low as it is] only because the energy prices were managed [by the Government]. The share of administered prices has increased recently. Conversely, with administered prices, everything becomes confusing," Lungu says, quoted by Ziarul Financiar.

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