New Price Increases
The beginning of July has seen a series of price increases, higher fines but also a higher minimum wage in Romania.
Valentin Țigău, 01.07.2013, 14:14
July has not brought in good news for Romanians, as a series of products have become more expensive. The price of gas has gone up by 8% for domestic consumers and by 3% for industrial consumers. Experts say the increase in the gas price will have repercussions on the entire food industry. Producers have already announced higher prices for milk and meat, by up to 15% by the end of the year.
Perhaps in an attempt to compensate for these price hikes, the Romanian government has increased the gross minimum wage by 50 lei to reach 800 lei per month. This increase will benefit over 677,000 employees in the private sector and all public sector employees. Is, however, this increase, enough to cover the impact of the new price rises? The vice-president of the Association of Financial and Banking Analysts in Romania, Ionut Dumitru:
Ionut Dumitru: “I don’t know if the negative impact on the purchasing power may be offset by this increase in the minimum wage, given that salary increases in general, whether minimum or average salaries, have a positive impact on the economy only if they are based on an increase in productivity. If we look at the productivity levels in Romania, I’m not sure the increase in the minimum wage, which will undoubtedly lead to an increase in the average wages as well, can be justified by an increase in productivity. Under the circumstances, I don’t think we can expect a positive effect in terms of the people’s purchasing power.”
The increase in prices is accompanied by an increase in traffic fines, which will stand between 150 and 1,600 lei for private persons and up to 8.000 lei for legal persons. Water and sewerage costs will also go up across the country by 4 to 10%, depending on each local authority. One piece of good news is that mobile roaming services across the European Union, including Romania, will be cheaper, in keeping with the new regulations adopted last year by the European Parliament.
