Inflation reaches 5-year peak

Romanias annual inflation rate has gone up constantly since the beginning of the year

România Internațional, 13.04.2018, 13:47

In Romania, the year-on-year inflation rate went up to 5% in March 2018, its highest level in the past five years, the National Statistics Institute (INS) announced on Thursday. According to INS, the increase is the result of a rise in the prices of non-food products by almost 7%, of food products by 4% and of services by around 3%. In the case of food, the price of citrus fruit went up the most, followed by fresh fruit and vegetable prices. Also in March, Romanians paid more for fuel and natural gas. A higher annual inflation rate than the current one was reported back in 2013 when consumer prices jumped 5.3%. In February 2018 the National Bank of Romania revised the inflation forecast for the end of the year from 3.2% to 3.5%.

Eurostat has also confirmed that in February this year Romania reported the highest annual inflation rate in the EU, namely 3.8%. The annual inflation rate in Romania has increased significantly since the start of 2018. In January, it went up to 4.32% from 3.32% a month before, while in February it stood at 4.72%. The Central Bank explained in February, when it made public its Report on inflation, that the main cause for this is related to the effects of the reduction and elimination of several indirect taxes and non-tax fees during the corresponding period of last year, as well as of the recent rise in the prices for electricity, natural gas, thermal energy and fuel.

Ionel Danca, the spokesman of the National Liberal Party (PNL), in the opposition, said Thursday, after the INS report was published, that such a high annual inflation rate means a significant increase in prices which impacts Romanians purchasing power. He added that the ruling alliance made up of the Social Democratic Party and the Alliance of Liberals and Democrats managed to counteract Romanias economic growth in one year alone. He also said that the government must be stopped through a censure motion tabled by the National Liberal Party.

In another development, the Government of Romania on Thursday passed an emergency order turning the National Commission for Prognosis into the National Commission for Strategy and Prognosis. According to the Government, the Commission will draw up economic development and social programmes, and surveys and forecasts on macroeconomic balance. Moreover, it will assess the economic and social impact of state aid schemes and of the public investment projects conducted through public-private partnerships.

(translated by: Elena Enache)