Romanian Inflation Hits Four-Year High

Consumer prices in Romania were up 3.23 per cent in November on the same month in 2016, the country’s National Institute of Statistics (INS) announced on December 12. The figure is the highest for more than four years, with prices up 0.66 per cent on October. The increase has been caused by the sharp growth in price of a number of everyday goods (particularly eggs and dairy products), as well as energy. High interest rates, and the unfavourable leu-euro exchange rate have also placed upward pressure on prices.

The governor of the Romanian National Bank (BNR) Mugur Isarescu said that he estimated inflation for the rest of 2017 to be around 3.1 per cent, and warned that it could rise over 4 per cent in the first quarter of 2018.

‘The rate of inflation will continue to rise through January, February and March next year, after which I expect it to flatten out,” Mr Isarescu said. In a thinly veiled dig at the government, he added: “Unfortunately, it is not easy to say what’s going to happen given that the fiscal environment is so unpredictable. Taxes go up, taxes go down. Is VAT going up? Is VAT going down?” The BNR’s original prediction of an annual rate of inflation for 2017 of 1.9 per cent has been revised a number of times.

The INS also announced on December 12 that the turnover of firms in manufacturing and industry had risen by more than 17 per cent in October compared to the same month in 2016. This follows a much smaller increase of just five per cent in September. The increase is primarily affected by climbing energy prices: companies in the oil extraction field saw the biggest jumps in turnover, well over 30 per cent.