From inflation to prices
The drop in inflation over the past 2 months does not necessarily mean living in Romania will be cheaper, as some current expenses are hard to cut down or postpone
Corina Cristea, 23.09.2026, 14:00
Romania sees the highest annual inflation rate in the EU, according to Eurostat data, although the rate has been dropping, from 9.7% in May to 8.2% in July and 6.3% in August. The significant decrease over the past 2 months does not necessarily translate into price drops, as some current expenses are hard to cut down or postpone.
Services now top the list of price increases, rising at a rate 4 times higher than that of foodstuffs and twice that of non-food products. Figures show that service prices have gone up nearly 11.3% over the past year, while non-foods saw an increase of around 6.4% and food prices rose by just over 2.6%. Meanwhile, the 6.7% rise in restaurant and café prices over the last year comes at a time when the sector is already grappling with declining business volumes. Flavius Jakubowicz, the head of the Romanian Association of Financial-Banking Analysts, explains why service prices are rising more steadily:
Flavius Jakubowicz: “Services are, essentially, labour. In a barbershop, an auto repair shop, or a medical practice, the primary cost is wages. Productivity growth in the service sector is slow, yet wages tend to align with levels across the broader economy. We could say that the relative price of services is rising structurally. Furthermore, in an economy undergoing convergence, services are the component that closes the gap with the EU most rapidly. Romania’s price level stands at approximately 65.1% of the European average.”
This impact is more severe for low-income households, as expenses with utilities, transport, or healthcare account for a larger share of their budgets. While a high-income household might respond to a hike in repair costs or utility bills by dipping into savings, a low-income family might be forced to forgo other essential expenditures.
Flavius Jakubowicz: “Purchasing power is declining. In July, the average net wages reached approx. EUR 1,160, accounting for a 5.5% annual increase, yet falling short of the 8.2% inflation rate. This creates a regressive effect, as expenses with utilities, transport, and healthcare are unavoidable. For low-income households, these costs account for a larger share of the budget. Consequently, the inflation they actually experience is higher than the official average.”
Rising costs and softening demand also create a difficult scenario for businesses: not all costs can be fully passed on to customers without risking the loss of even more consumers. According to National Bank of Romania estimates, inflation is projected to drop to 6.1% by the end of 2026 and continue falling next year. However, the recovery in the services sector may be slower. (AMP)
