Inflation edges down to 16.4% y/y in Romania

Inflation edges down to 16.4% y/y in Romania
/ bne IntelliNews
By bne IntelliNews January 16, 2023

Headline inflation edged down to under 16.4% y/y in December, from nearly 16.8% y/y in November, according to data reported by the statistics office INS.

The National Bank of Romania (BNR) expects the annual inflation to ease slightly during the first quarter of this year and, amid base effects, much faster afterwards to reach single-digits during the third quarter of the year.

Consistent with such expectations, still seen as slightly optimistic by independent analysts, the central bank is seen as maintaining the monetary policy unchanged until the end of 2023.

The average consumer prices increased by only 0.37% in December, the lowest monthly inflation since November 2021.

Fuel prices dropped by 6.5% in the month, with a 0.52pp contribution on the monthly and annual inflation.

Compared to December 2021, however, fuel prices were 12.4% higher in December 2022, which contributed 1pp to the overall 16.4% annual inflation.

The prices of electricity and natural gas contributed a combined 3.3pp despite the cap and subsidy scheme financed by the government.

The more expensive food (+22% y/y) contributed a massive 7.3pp to the overall inflation.

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