Energy, fuel price hikes bring inflation to 5.35%

As last month saw consistent price hikes, driven up by increases in energy and fuel tariffs, the inflation was up to 5.25% in August compared to the same month last year. Electricity, oil, gas and fuel are the products that have become more expensive compared to August 2020.

According to data released by the National Institute for Statistics (INS) on Friday, the annual inflation rate went up to 5.3 pct in August 2021, from 5 pct in July, given that non-food stuffs were more expensive by 7.92 pct, foodstuffs by 2.7 pct, and services by 2.97 pct.

According to the INS, consumer prices in August 2021 compared to July 2021 increased by 0.2 pct. The inflation rate at the beginning of the year (August 2021 compared to December 2020) is 4.7 pct. The annual inflation rate in August 2021 compared to August 2020 is 5.3 pct. The average ratio of consumer prices in the past 12 months (September 2020 – August 2021) over the previous 12 months (September 2019 – August 2020) is 3.3 pct.

Furthermore, the harmonized indices of consumer prices in August 2021 compared to July 2021 is 100.18 pct.

According to the INS, the annual inflation rate in August 2021 compared to August 2020 calculated on the basis of the Harmonized Indices of Consumer Prices (HICP) is 4 pct. The average ratio of consumer prices in the past 12 months (September 2020 – August 2021) over the previous 12 months (September 2019 – August 2020) determined on the basis of the HICP is 2.6 pct.

The National Bank of Romania increased to 5.6 pct its inflation prognosis for the end of this year, according to a presentation done in August by the Governor of the Bank of Romania, Mugur Isarescu.

PM Florin Citu voiced confidence on Friday, that the National Bank of Romania (BNR) will intervene in order to “temper the inflation dynamics”, after the inflation rate was 5.3% in August . He argued that net investments in the economy have gone up from the previous year by 10%, expressing his trust that the fiscal and monetary policies will determine a drop in inflation.

“We see this rise in prices especially in foodstuff. I looked at the numbers this morning. That is where the dynamic is the largest, in foodstuff. For non-food items there is a 3% increase. I trust that the National Bank of Romania will find the solution for tempering the inflation dynamics, but we have also some good news today: net investments in the economy have gone up from the previous year, when we had record investments, they increased by 10% during the first half of the year or by 12% during the second quarter, which means that our strategy of investing in the economy, of increasing income, is working and I believe that the fiscal policy we are implementing, along with the monetary policy, will surely lead to a reduction in the inflation dynamics and will yield good results in the upcoming period,” PM Citu said.