Romania Records Highest Inflation in EU for Sixth Consecutive Month

The annual inflation rate in the European Union decreased in August to 2.4%, from a level of 2.8% in July, and Romania is, for the sixth month in a row, the country with the highest inflation in the bloc community, with an annual price advance of 5.3%, according to the data published on Wednesday by Eurostat.

In August, the EU member states with the lowest annual inflation rates were Lithuania (0.8%) and Latvia (0.9%). At the opposite pole, the EU member countries with the highest inflation rates were Romania (5.3%), Belgium (4.3%) and Poland (4%).

Compared to the data from July 2024, the annual inflation rate decreased in 20 member states, including Romania from 5.8% to 5.3%, remained stable in one country and increased in six states members. In the euro area, the annual inflation rate decreased from 2.6% in July to 2.2% in August.

However, Eurostat data shows that core inflation, i.e. what remains after prices for volatile goods such as energy and food are removed, remained stable at 2.8%. Another indicator that, in addition to energy and food prices, also excludes cigarette and alcohol prices, decreased slightly, from 2.9% to 2.8%. Core inflation is the indicator closely followed by the ECB when elaborating its monetary policy decisions.

In the case of Romania, the National Institute of Statistics (INS) reported last week that the annual inflation rate dropped, in August, to 5.1%, from 5.42% in July, as food commodities they increased in price by 4.25%, non-food by 4.35%, and services by 8.60%. The harmonized consumer price index in August 2024 compared to July 2024 was 100.28%.

The annual inflation rate in August 2024 compared to August 2023 calculated on the basis of the Harmonized Index of Consumer Prices (HICP) was 5.3%. The average rate of change in consumer prices in the last 12 months (September 2023 – August 2024) compared to the previous 12 months (September 2022 – August 2023) determined on the basis of the HIPC was 6.7%.

The National Bank of Romania (BNR) revised down the inflation forecast for the end of 2024 to 4%, from 4.9% previously, and anticipates that it will reach 3.4% at the end of 2025, according to the data presented in August by the governor of the BNR, Mugur Isărescu.