Romania, slight drop in inflation
The annual inflation rate stood at 7.2% in Romania.
Roxana Vasile, 14.03.2024, 14:00
The annual inflation rate in Romania dropped slightly, from 7.4% in January, to 7.2% in February, the National Statistics Institute reports. This means prices won’t be going up just as fast, although they will remain high compared to people’s purchasing power, economic experts say. According to statistics, Romania reports the highest inflation rate at EU level, where the average stands close to 3%. In Czechia, for instance, the inflation rate dropped below 3% in February, while in Hungary it stood at 3.7%. As of next month, Poland will lift the 0 VAT rate on food amidst an unexpected drop in inflation. In Romania, food prices remain high, while prices for services are on the rise. In February, prices for non-food products reported the highest increase on average, followed by prices for services and food. Major price hikes were also reported in February for potatoes – once the cheapest vegetable – 4.9%.
Other fresh and canned vegetables reported price increase by 3.4% on average. Other price hikes were reported for fresh fruit – approximately 4.7%, detergents – 3% and prices for car subscriptions – 2.6%. Waterworks, sewerage and waste collection prices also went up by 2%. The most significant drop in prices was reported for airline tickets – 17%. Butter was also 9% cheaper compared to January. In the last 12 months, the highest price hikes were reported for postal services, which went up by 26.6% on average, and detergents – nearly 24%, followed by waterworks, sewerage, waste collection services as well as personal hygiene, cosmetics and medical products. We recall that the inflation rate stood at 6.6% at the end of 2023. As estimated by the National Bank of Romania, the inflation rate went up in January 2024 to 7.4%, and is expected to enter a downward trend of the course of this year. The increase was determined by the increase and introduction of indirect taxes with a view to consolidating the state budget. The subsequent drop in inflation could be determined by the downgrade in stock market prices for agrifood products and crude oil, but also by the fluctuation of import prices. The Central Bank expects the inflation rate to level out at 4.7% at the end of the year and to stand at 3.5% at the end of 2025. (VP)
