Inflation on the rise again
Inflation has increased, again, in Romania, for the second consecutive month.
Roxana Vasile, 12.12.2024, 14:00
Postal services, fresh fruit or margarine were among the most expensive items in Romania in November this year, show data published by the National Institute of Statistics, according to which the annual inflation rate increased, again, compared to the previous month. More precisely, it reached 5.11% of the Gross Domestic Product, from 4.67% in October. It thus reached a level similar to that recorded in August, and also to that recorded in May. It shows the oscillating trajectory that the indicator followed in 2024, after it decreased from 6.61%, as it had been in December 2023. Romanians had to take more money out of their pockets, especially for fresh fruits, over 6.5% and also for electricity, approximately 3.4%. On the other hand, in November compared to October, air transport services recorded a decrease of over 8.2%, followed by thermal energy almost 5%.
Statistics for the last 12 months reveal price increases for postal services, with average increases of almost 18%, followed by fresh fruit with over 17% and margarine, with approximately 16%. Compared to November 2023, the prices of foods increased, on average, by 5%, and of services by 7.5%.
Financial analyst Adrian Codirlaşu, president of CFA Romania, an association that brings together investment professionals is here with details: ʺAs to the services component, if we look at all the monthly reports, we see that it remains consistently at high levels. We have had successive increases in the minimum wage. Most of the workers, paid with the minimum wage, are in this services component, and therefore, on the services side, we had an increase in cost, which is then reflected in prices, as is normal. Hence this slight increase in inflation. We also have a high budget deficit. The high budget deficit is inflationary. Why? Because the action of the Government, when issuing debt to finance it, is practically the equivalent of printing money, money that seeks to buy goods and services, so it increases demand and automatically prices.”
For 2025, analysts anticipate an inflation rate around 5%, with a higher value being possible at the beginning of the year. The National Bank of Romania has revised upward, to 4.9%, the inflation forecast for the end of 2024 and anticipates that it will reach 3.5% only at the end of next year. But nothing is certain! Fiscal policy and salary increase at the national level, as well as, externally, the evolution of the European economies, the dynamics of the oil price or the conflicts in Ukraine and the Middle East generate uncertainties. (LS)
