Record-high inflation in Romania

The annual inflation rate in Romania reached 16.8% this November, from 15.32% in October, as foodstuff prices went up 21.55%, non-food prices 16.17% and services are 9.51% more expensive, according to the National Statistics Institute. 

The figures are above the 16.3% inflation forecast made public last week by the central bank governor Mugur Isărescu. It is also the highest inflation rate reported over the past 2 decades-the annual inflation rate was 22.5% in 2002, but stayed at one-digit levels ever since.

Sugar prices have seen the steepest increase: 61.94% in November 2022, compared to November 2021. Other foodstuffs for which significant price rises are reported include butter (43.43%) and sunflower oil (40.66%). In the non-food category, substantial price increases are reported for electricity (47.19%), natural gas (37.63%), heating (22.93%) and fuels (19.24%). As for services, prices have soared for air transport (23.83%), water supply and sewage services (21.54%) and railway transport (20.92%).

Overall, inflation has made a big dent in Romanians' spending power. For the nearly 5 million pensioners that represent the most vulnerable of them, the ruling coalition made up of the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania saw fit to only increase pensions by 12.5% as of January 1, which is considerably below the inflation rate.

As for the active population, also according to the National Statistics Institute, the average net income stood at roughly EUR 800 this October, only one euro more than in September 2022. The highest salaries are paid in the IT sector-a little over EUR 1,900. At the opposite pole are the wages in the hospitality sector, around EUR 450.

In this rather dark context, a recent survey found that the top 3 main concerns for Romanians during this winter season are the inflation, the Russian invasion in neighbouring Ukraine and the cost of healthcare services. Over the past 4-6 weeks, 80% of Romanians have changed their consumer behaviour, whether we look at foodstuffs or other essential products. People are choosing cheaper brands, particularly for household products, snacks and sweets, frozen foods, dairy products and eggs. In the past month, 3 out of 10 Romanians have switched stores and chosen shops with smaller prices in order to save money.

The survey, which covered around 1,000 respondents over 18 years of age from all social categories, also indicates that a majority of Romanians expect prices to continue to rise throughout the coming year. (AMP)