Wages lag behind consumer prices in Romania

The economy-wide average net wage in Romania increased by 12.8% YoY to RON 3,933 (EUR 795) in August 2022 while decreasing by 1.1% compared to the previous month.

The wages posted growth rates below inflation for the fifth month in a row, and this is not likely to change soon - which puts pressure on households' budgets, likely to see the impact of higher mortgage rates and energy bills soon.

The consumer price inflation rate was 15.3% YoY in August, 1.5pp faster than the net wages, and accelerated to 15.9% YoY in September. And yet, the demand-side inflationary pressures are relevant.

"Despite wages not rising faster than prices, people are spending what they had saved during the pandemic crisis when they were forced to stay home. Furthermore, the supply lags behind the demand," explains independent analyst Aurelian Dochia.

The effects of past QE policies are surfacing as well, he adds. "Now, this money surfaces in the market and, naturally, it causes inflation."

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