Bucharest, September 18, 2024 – RBJ – 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 EU bloc, 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.
According to the presentation, the tendency to reduce the inflation rate will continue for almost the entire projection interval, but the rate of disinflation is expected to slow down noticeably in the second part of it. “The trajectory is marked by some rhythm oscillations, mainly induced by basic effects associated with past developments: increases in indirect taxes in January 2024, with a favorable effect in January 2025; corrections of natural gas tariffs and prices of vegetables, fruits, eggs in the second quarter of 2024, with an unfavorable effect in the second quarter of 2025; fuel excise increase in July 2024, with a favorable effect in July 2025,” the Quarterly Report on Inflation stated.
