The annual inflation rate (chart) remained constant in August, 9.4% – virtually at the same rate as in July, according to the statistics office INS.

The core inflation (not directly published by INS) must have declined by some 1pp to around 12% y/y according to bne IntelliNews estimates, which indicates a still wide spread above the headline inflation.

Consumer prices increased by 0.54% m/m in the month.

The price of food dropped by nearly 2% m/m under the impact of the emergency decree capping the margins charged by retail and distribution companies for basic food goods. On an annual basis, food prices were, however, 11.9% higher.

Prices of non-food goods increased by 2.4% m/m (+7.0% y/y) as the price of car fuels edged up by 3.9% m/m. Over the past year, the average price of energy increased only marginally and the fuel price decreased, which contributed to a below-average rise of the non-food component of the inflation. 

In its September 9 update on Romania, international rating agency Fitch said that it expected “lengthy disinflation until 2025 in light of inertia”.

Fitch expects Romania’s HICP inflation (9.3% y/y in August)  at 9.3% in 2023, 5.6% in 2024 and 4.2% in 2025, with risks skewed to the upside.

The fall in inflation is driven by favourable dynamics of energy and food prices, while domestic price pressures are more persistent, as signalled by core inflation of 13.1% in July, almost 4pp higher than headline inflation.