Rising industrial prices still put pressure on Romania’s headline inflation

Rising industrial prices still put pressure on Romania’s headline inflation
By bne IntelliNews July 6, 2022

Industrial, or factory-gate, prices in Romania have increased by 46.6% y/y in May, driven up by the rising energy prices, according to the statistics office INS.

The average price of electricity, gas and steam increased by 136% y/y and the price of energy, in general, rose by 130% y/y.

The prices of intermediate goods — a good proxy for the overall inflationary developments because of its lower volatility and for illustrating the pass-through of energy prices to end-user (consumer) prices — increased by 34% y/y or by 48% compared to two years ago in May 2020.

This will maintain significant inflationary pressures over the coming quarters.

Consumer goods prices increased by comparatively slower rates that are still in the double-digit area: by 18% for durable goods and by 15% for non-durable goods.

The INS will announce the June consumer inflation figure, expected to be above 15%, on July 12.

Headline inflation rose to 14.5% y/y in May, up from 13.8% y/y in April, the statistics office INS announced.

It will not drop in the single-digit area until mid-2023, the National Bank of Romania (BNR) estimates.

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