Romania's inflation eases to 10.25% in June, in line with expectations

The consumer price inflation in Romania eased to 10.25% y/y in June, from 10.64% y/y in May, staying close to the trajectory envisaged by the National Bank of Romania (BNR), which expects the inflation to reach 7.1% by the end of the year.

In June, the food prices have seasonally declined by 0.1% m/m, but they remain relatively high: 17.9% higher compared to June 2022.

The prices of non-food goods, which include car fuels (-10.8% y/y) and energy (electricity, gas and heating), increased by only 4.8% y/y on average.

The energy prices increased on average by 7.1% y/y after, in accordance with the provisions of Government emergency ordinance 27/2022, the new capped final prices charged were taken into consideration as of January 1, 2023.

"Returning inflation to the BNR's target range may be a much more difficult task, given the inflation profile of recent months. The current evolution of CPI is in line with our view that general inflation is likely to enter the single-digit zone starting in the third quarter and end the year at 7.5% y/y. We do not expect it to enter the target range [2.5%+/-1pp] next year either", according to a research note by BCR economist Vlad Ionita.

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