Bucharest, July 8, 2025 – RBJ – In its meeting of 8 July 2025, the Board of the National Bank of Romania decided the following:
>>> to keep the monetary policy rate at 6.50 percent per annum;
>>> to leave unchanged the lending (Lombard) facility rate at 7.50 percent per annum and the deposit facility rate at 5.50 percent per annum;
>>> to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
The annual inflation rate stayed in April 2025 at 4.85 percent (4.86 percent in March), while in May it increased to 5.45 percent. The advance versus the end of 2025 Q1 owed to a further faster rise in food and energy prices, which outweighed considerably, in terms of impact, the new decreases in the dynamics of fuel and tobacco product prices, as well as of the non-food sub-component of core inflation.
In turn, the annual adjusted CORE2 inflation rate saw yet again a halt in its downward trend, going up to 5.4 percent in May, from 5.2 percent in March, given that the influences stemming from disinflationary base effects and the decline in import price dynamics were more than offset over this period by those coming from the hike in some agri-food commodity prices and the gradual pass-through of high wage costs to some consumer prices, as well as from the pick-up in short-term inflation expectations and the increase in the EUR/RON exchange rate.
The annual inflation rate calculated based on the Harmonised Index of Consumer Prices (HICP – inflation indicator for EU Member States) rose to 5.4 percent in May 2025 from 5.1 percent in March 2025. Nevertheless, the average annual CPI inflation rate fell to 5.0 percent in May from 5.1 percent in March 2025. In turn, the average annual HICP inflation rate dropped to 5.2 percent in May 2025 from 5.4 percent in March 2024.
Economic activity stalled in 2025 Q1, after adding 0.5 percent in the previous three months (quarterly change), which makes it likely for the negative output gap to open more visibly over this period compared to expectations.
Annual GDP growth contracted further in 2025 Q1 to 0.3 percent from 0.5 percent in 2024 Q4. Domestic demand continued, however, to see a swifter increase in annual terms, mainly on account of the dynamics of gross fixed capital formation, which surged, making a strong return into positive territory, whereas household consumption posted a notably slower rise, but remained the main driver of GDP advance.
By contrast, in 2025 Q1 net exports exerted again a significantly larger contractionary impact, given the further widening of the negative differential between the annual dynamics of exports of goods and services, in terms of volume, and those of imports, amid the latter advancing somewhat more visibly versus the previous quarter. Consequently, the annual growth rate of trade deficit posted a strong re-acceleration, while the current account deficit continued to record a fast year-on-year pace of increase.
The latest data and analyses point to moderate quarterly economic growth in 2025 Q2, in line with previous forecasts, amid mixed developments across the aggregate demand components and major sectors compared to the same year-ago period.
Thus, in April 2025, the annual growth rate of retail sales continued to slow down, while services to households recovered most of the decline seen in the previous quarter. The annual dynamics of the volume of construction works slipped very slightly back into negative territory, but industrial output posted a significantly stronger contraction versus the same year-ago period. At the same time, the annual change in exports of goods and services witnessed a heftier decline versus 2025 Q1 as compared to that in the imports thereof, and hence the annual increase in the trade deficit remained particularly fast in April, much the same as that in the current account deficit, which, however, moderated visibly.
