Competition Council: Foodstuff price hikes could be caused by the budget deficit

The Competition Council (CC) has begun an analysis, upon the Ministry of Agriculture’s request, to determine the causes of the accelerated price rise for foodstuff this month, one of the possible reasons being the increase of the budget deficit, which leads to higher imports and puts pressure on inflation, President of the Competition Council Bogdan Chiritoiu has said on Tuesday.

“The excess of demand in the budget deficit attracts imports, thus the budget deficit leads to decrease in the exchange rate and generates inflation. Since most of the foodstuff is imported and the national currency decreases against the EUR , they generate price increases. These are laws of the economy,” Chiritoiu said.

“We received from the Ministry of Agriculture a request to analyze the foodstuff prices, especially butter, eggs and some meat products, where prices have had radical changes. It is a good idea to have such a referral, but it would be even better if they come up with figures, with more information. We requested this because the relevant ministry has more information on this issue,” Chiritoiu added.

He said that some price increases seem to have regional character, such as eggs and butter, but this would not fully justify the price increases in Romania.

At the same time, asked if there is any suspicion of an agreement between retailers, Chiritoiu replied: “I could not say this now, it is too soon. We will analyze the whole chain, from production to the shelf, to see if we are dealing with a functional market mechanism.”

Bogdan Chiritoiubudget deficitbutterCompetition CouncileggsfoodstuffmeatMinistry of Agriculturenational currencyprice hikesretailers
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