By the end of January 2024, the Romanian CPI grew by 1.1% MoM, and 7.4% YoY.
According to the latest release by the Romanian National Institute of Statistics, the Romanian CPI growth accelerated to 7.4% YoY, growing for the 1st time after months of deceleration. On the monthly basis, the CPI growth was also noteworthy, at 1.1%. Of course, unlike the Eurozone member countries, Romania uses its own currency which allows more flexibility for its Central Bank, but also means that inflationary pressures can be stronger.
Romanian CPI (January 2020 – January 2024, %)
Source: Romanian National Institute of Statistics, InterCapital Research
Breaking this growth down into the components, on the MoM basis, prices in Services recorded an increase of 1.6%, prices in Food goods grew by 1.3%, while prices in Non-food goods increased by 0.7%. Meanwhile, on the YoY basis, prices of Services grew by 10.9%, prices of Non-food goods increased by 7.4%, while prices of Food goods grew by 5.6%. As we can see on both the MoM and YoY basis, prices across various categories are still growing, instead of being influenced by a single category. This is what is usually referred to as “sticky” inflation, and this type of inflation is usually harder to combat. The reason is the fact that the usual way of combating inflation, i.e. increasing interest rates and keeping them elevated to reduce demand does not influence different categories of products/services/sectors in the same manner.
The Harmonized Index of Consumer Prices (HICP) is yet to be published for Romania, but at the current inflation levels, it would place the country’s inflation close to the top, if not at the top of the YoY inflation growth.
