Consumer price inflation in Romania reached 4.95% in July, rising sharply from 3.8%-3.9% in May-June, the statistics office (INS) announced.

Behind the spike, there are the energy prices. Central bank governor Mugur Isarescuy pledged to “prevent energy prices from passing through into the regulated prices of utilities”, but it remains unclear how this can be done.

The inflationary expectations can, in principle, be toned down, though, by more restrictive fiscal and monetary policies.

Based on harmonised basis (the harmonised consumer basket used in the European Union), the inflation rate in Romania is still only 3.8% in July, up from 3.5% in June. Based on some real consumption baskets, the inflation might be even higher than the headline figure.

Returning to national official consumer basket, the food prices increased on average by only 2.3% in July, compared to the same month of 2020.

The non-food prices were dragged up (+7.6% YoY) by the energy prices that have further increased in July. 

The electricity price soared by nearly one quarter (25%) compared to July 2020 after leaping up another 4.2% in July compared to June.

The natural gas spruce increased by 20% in July compared to June 2021 after it had remained roughly steady over the previous 12 months.

The heating price decreased slightly in July compared to June, but they will be revised as the cold season approaches. 

(Photo: Bizroug/ Dreamstime)

andrei@romania-insider.com