Consumer prices in Romania (chart) increased by 8.1% y/y in October, the statistics office INS announced. Prices rose by 0.57% on average in the month, compared to September.
Compared to the 8.83% y/y inflation in September, the decline was visible in October. Further improvement is expected in November while the central bank projects the yearend inflation at 7.5% y/y.
Regarding the inflation as of October, food prices increased the most, by 8.7% y/y, while non-food prices advanced by only 6.2% y/y. The fees paid for the services delivered to households (including utilities) increased by as much as 12.2% y/y. The average price of municipal utilities (water, sewerage, municipal solid waste) surged by more than 21% over the past 12 months.
Romania’s central bank, the National Bank of Romania (BNR), has kept the policy rate at 7% since January and BNR governor Mugur Isarescu recently poured water on hopes for rate cuts in the predictable future.
The real policy rate is still negative and inflation is expected to rise during the first quarter of 2024 in response to the fiscal package, Isarescu explained.