Romania’s Inflation Exceeds 15% In June And is Rising
Consumer prices in Romania reached 4.95% in July, up significantly from 3.8%-3.9% during the month of May-June, according to statistics agency INS.
Romania’s headline inflation rose from 14.5% in May to almost 15.1% in June, following 0.8% consumer price rise in June, the statistics office (INS) announced.
Romania’s average consumer prices rose 1.8 percent in October alone, driven up by higher energy prices, and annual inflation reached 7.9 percent y/y — a substantial improvement of 1.6 percentage points over September’s 6.3%, and above the consensus expectations, most significantly.
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In Romania, inflation remains elevated at 5.4% (unchanged since May) and has now exceeded the target range of 3%+-1pp for six consecutive months.
The Romanian national bank expected an expected acceleration in annualized CPI inflation rates through June, facing the pressures from manufacturing costs, which were worsened by the Russian invasion of Ukraine.
In May 2022, the Bank of Romania (BNR) increased its inflation forecast for the year by the Bank of Romania, reaching 12.5% at the end of the current fiscal year, while it estimated that inflation would reach 6.7% at the end of the next fiscal year.
Notably, the annual inflation rate is expected to continue its sharp upward trend through the middle of 2022 — climbing as high as 7.5 % in December 2021 and as high as 8.6 % in June 2022, far higher than previously projected values of 5.6 and 4.2 percent, respectively.
Based on the current assessments, the annual inflation rate is likely to gradually increase over the coming months, influenced by supply-side shocks, exceeding the values shown for this time frame in the medium-term outlook from last November.