INS: Cost-of-living crisis worsening in Romania

The Household income and expenditure report released by the National Institute of Statistics (INS) today revealed that most Romanians are going through a cost-of-living crisis that has impoverished them compared to last year. And in the first quarter of this year, bank rates, utility and health expenses created the biggest holes in the family budget.

Expenses with insurance and bank rates increased by 40%, and those with health and utilities by 15%, says the INS in the release on the incomes and expenses of Romanian families in the first quarter. This while revenues increased by 5% compared to the previous quarter.

The total monthly average income was, in nominal terms, 6979 lei per household and 2797 lei per person in QI 2023, an increase of 5.2% and 5.6%, respectively, compared to QIV 2022. Compared to the first quarter of the previous year, the total monthly average income per household rose by 12.1% and the total monthly average income per person increased by 13.0%.

In QI 2023, the total monthly average expenditure3) of the population was 5971 lei per household (2393 lei per person) and accounted for 85.6% of the total income, a decrease of 2.5 percentage points compared to QIV 2022. Compared to the first quarter of the previous
year, the total monthly average expenditure per household increased by 12.2% and the total monthly average expenditure per person rose by 13.1%.

In QI 2023, the monthly average money income was 6363 lei per household (2550 lei per person), increasing by 4.2% compared to
QIV 2022, and the in-kind income was 616 lei monthly per household (247 lei per person), 16.4% higher than in QIV 2022. Salaries and
other income related to them amounted to 4526 lei monthly per household and were the most important source of the total income
(64.9% of the total household income, 1.7 percentage points less than in QIV 2022).
Significant contributions to the formation of the total household income were made by the income from social benefits, with 1483 lei monthly per household (21.3% in QI 2023 and 19.9% in QIV 2022, respectively, of the total household income), and by the in-kind income (8.8% in QI 2023 and 8.0% in QIV 2022, respectively), which consists of the value of the in-kind income obtained by employees and recipients of social benefits (1.9% in QI 2023 and 1.7% in QIV 2022, respectively) and the value in lei of the agri-food and non-food products consumed from own resources (6.9% in QI 2023 and 6.3% in QIV 2022, respectively).

As regards the area of residence, the level of the total monthly average income per household in QI 2023 was 7706 lei in the urban area, 1.3 times more than in the rural area, and the income per person was 3303 lei, 1.5 times more than in the rural area.
In terms of the structure of the total income, in QI 2023, in the urban area, the share of gross salaries and other salary rights in the total income was 71.5%, i.e. 17.3 percentage points more than in the rural area, while, in the rural area, the income from social benefits accounted for 22.5%, higher by 2.0 percentage points than in the urban area, and the in-kind income was 15.2%, i.e. 3.2 times greater than in the urban area.

In QI 2023, the main uses of the expenditure incurred by households are consumption, with 3702 lei monthly per household (62.0%), and the transfers to public and private administration and to social insurance budgets in the form of taxes, contributions, dues, with 1888 lei per
household (31.6%), as well as the meeting of needs related to household production, with 181 lei per household (3.1%).

Regarding the year 2022, the number of those who cannot afford vacations or those who cannot afford purchases in general has increased.

Depending on the area of residence, there are differences in the level of the total monthly average expenditure. In the urban area, the monthly average expenditure per household was 6573 lei, i.e. 1.3 times higher than in the rural area. This means that one person from the urban area spent, on average, 2817 lei monthly, 1.5 times more than one person from the rural area. In terms of the structure of the total expenditure, in the urban area, the share of the expenditure on taxes, contributions, dues and fees in the total expenditure was 35.3%, i.e. 9.4 percentage points more than in the rural area, while, in the rural area, the share of the equivalent value of the consumption of agri-food and non-food products from own resources in the total expenditure was 4.4 times higher than in the urban area.

According to the standard classification of consumption expenditure by use (COICOP), food goods and non-alcoholic beverages, amounting to 1301 lei per household, had a significant share in the total consumption expenditure of households (35.1%). These are followed, in terms of size, by the expenditure on the dwelling, water, electricity, gas and other fuels, amounting to 682 lei per household, with a share of 18.4% in the total
monthly average consumption expenditure, and by the expenditure on alcoholic beverages and tobacco, amounting to 271 lei per household, with a share of 7.3% in the total monthly average consumption expenditure. The lowest level of expenditure was that incurred on education, with 24 lei per household (0.7% of the total monthly average consumption expenditure), as well as that on insurance and financial services, with 31 lei per household (0.8% of the total monthly average consumption expenditure).

bank ratescost of livingcrisisexpenditurefamily budgethousehold incomeINSnational institute of statisticsRomaniansutilities
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