In December, Romania recorded a 0.2% MoM increase in CPI, bringing annual inflation to 9.7%, while HICP remained unchanged at 8.6%. This confirms that, despite a marginal deceleration, price pressures remain entrenched. At the same time, average net earnings rose by 2.2% in November compared to October, but annual nominal wage growth of 4.2% continued to lag inflation, resulting in a further erosion of purchasing power. These dynamics unfold against a challenging macroeconomic backdrop marked by near-stagnant growth and aggressive fiscal consolidation.
Compared to November, December saw a modest acceleration in consumer prices, with the CPI rising 0.22% MoM. On an annual basis, inflation eased slightly to 9.7% from 9.8%, marking the first deceleration in several months. Nevertheless, inflation remains elevated by historical standards. Moreover, the 12-month average inflation rate increased to 7.3% from 6.9%, highlighting the transition from what was once perceived as transitory disinflation toward a structurally higher inflation regime.
Romanian CPI YoY growth rate (January 2019 – December 2025, %)
Source: Romanian National Institute of Statistics, InterCapital Research
A breakdown by category shows that services recorded the strongest annual increase at 11.0%, followed by non-food goods at 10.5% and food prices at 7.8%. On a monthly basis, services prices rose by 0.28%, non-food goods by 0.08%, while food prices increased by 0.37%. The marginal easing in headline inflation was primarily driven by softer non-food price dynamics, while services inflation remained stubbornly elevated, underscoring persistent domestic cost pressures.
HICP YoY change for selected EU countries (December 2025, %)
Source: Eurostat, InterCapital Research
Turning to the Harmonized Index of Consumer Prices (HICP), Romania recorded a 0.23% MoM increase and an annual rate of 8.6% in December, unchanged from November. Romania thus continues to post the highest inflation rate in the EU, significantly exceeding the euro area average of 2.0%. This persistent divergence reinforces the view that Romania’s inflation episode is increasingly domestically driven, reflecting fiscal adjustment measures, labor-cost pressures, and long-standing structural vulnerabilities rather than imported inflation alone.
On the wage front, average net earnings reached RON 5,615 in November 2025, up 2.2% MoM, while gross earnings increased to RON 9,371, a 2.4% monthly rise. However, once adjusted for inflation, real earnings declined markedly compared to November 2024. Nominal wage growth of 4.2% YoY fell well short of the 9.8% inflation rate recorded in November, implying a real wage contraction of approximately 5.4% and a continued squeeze on household purchasing power.
Evolution of net average earnings (November 2024 – November 2025, RON)
Source: Romanian National Institute of Statistics, InterCapital Research
From a sectoral perspective, the strongest increases in net earnings were observed in the manufacture of machinery and equipment (+15.7%), as well as in electrical equipment manufacturing and IT-related services (+7.5% to +10.5%). These gains were largely driven by occasional bonuses, year-end payments, payments in kind, profit distributions, and improved production performance. In contrast, air transport continued to experience wage pressure, with net earnings declining by 4.0%.
In the budgetary sector, average net earnings increased modestly in education (+1.1%), primarily due to hourly payments for teaching staff, and in health and social work (+0.4%), while public administration recorded a marginal decline (-0.1%). These developments come amid aggressive fiscal consolidation, as the government has implemented a freeze on public sector wages and pensions at November 2024 levels, as part of an omnibus decree aimed at reducing potential expenditures by RON 133bn.
Overall, compared to early 2025, Romania’s inflation narrative has shifted decisively. What was previously framed as a gradual disinflation process supported by base effects and energy price caps has evolved into a prolonged high-inflation environment, driven by policy normalization, fiscal-electoral dynamics, and persistent structural pressures. Upcoming energy price cap removals pose a renewed upside risk to inflation. As a result, inflation risks remain structurally skewed to the upside, with purchasing power erosion likely to persist well into 2026.
For a more detailed analysis of macroeconomic developments in Romania and other selected CEE markets, refer to our latest IC Macro Outlook, prepared by our Proprietary Trading team.