Romania’s headline inflation increased to nearly 15.1% YoY in June, from 14.5% in May, after the consumer prices rose by 0.8% in June, shows the statistics office INS.
The price of car fuels kept growing in June, by 3.2% compared to May and by 41% YoY. The average price of energy items (natural gas, electricity and heating) increased by the same annual rate – 41% YoY.
Energy and fuels accounted for over 16% of the consumption basket and contributed some 6.6pp to the overall 15% YoY inflation in June.
The price of natural gas rose by nearly 90% YoY while the electricity price was more stable and advanced by only 17% – both being capped by the Government under a scheme prolonged until April 2023.
Food prices have advanced in line with the average inflation, by 15% YoY and the prices of services lagged behind with a more moderate 7.8% annual advance.
The price increases proved more persistent than expected, the governor of the National Bank of Romania (BNR), Mugur Isărescu, admitted last week – after the central bank hiked the refinancing rate by 1pp to 4.75% – a record for the past decade.
„We are already on a higher trajectory of inflation [compared to our past projections]. The trajectory will be prolonged and slightly higher than the forecast included in the past inflation report. Inflation is higher than expected,” the governor admitted.
Thus, according to revised estimates, the annual inflation rate will continue to rise until the middle of the third quarter, under the impact of supply-side shocks, but at a visibly slow pace – thus rising moderately above the values forecast in May.
In May, the central bank revised its inflation forecast upwards to 12.5% by the end of this year and estimated inflation at 6.7% by the end of next year.