SIMILAR ARTICLES

Labour cost: steepest and largest increase in the EU. And mostly concentrated on non-business sector

Romania recorded in the first quarter of 2018 the highest labour cost increase among all EU member states, according to data released by Eurostat. With… Mai mult

Company financing: Firms’ aversion to credit – at high levels. Most favourite banking product – account overdraft

The rise in interest rates and fees is becoming increasingly worrying for companies and maintains companies’ aversion to banking lending at high levels, according to… Mai mult

“Everything in One Hand” project continues: Law which pushes Court of Auditors beneath Administration’s feet – adopted

The Senate adopted on Thursday the draft amending Law 94/1992 on the organization and functioning of the Court of Auditors, which contains amendments that could… Mai mult

Government is hardly competing with private economy on banks’ money. Which are satisfied: less work, lower risks

  The volume of government credit has increased about 10 times over the last 10 years, and the share in total banking investment in Romania… Mai mult

Romania’s public debt – Level and evolution

Government debt service for 2019 will surely exceed the 2018 level, according to the projection made by the Ministry of Finance based on the debt… Mai mult

Inflation in Romania, seen from Europe

de Marin Pana , 26.3.2018

In the first month of the year, prices were higher by 2.66% compared to 2015, according to the data published by INS in the middle of this month in the statistical bulletin 1/2018.

According to the harmonized European classification of goods and services, Romania is slightly above the European average of 2.27%, below the Czech Republic (+ 4.4%) or Hungary (+4.01%) and close to Poland (+ 2.4%) or Slovakia (+ 2.59%).

Noteworthy, at the confluence of 2017 and 2018 all these countries were positioned in contrast with the trend of the EU average (-0.7% monthly price increase between December 2017 and January 2018). Slovakia recorded the fastest advance, with + 0.9% and the Czech Republic was on the same level with us (+ 0.7%), while Hungary (+ 0.3%) and Poland (+0.2%) recorded lower positive values.

Along with them, we are among the only eight EU member states where prices increased in the first month of this year, while in other 19 countries, prices have decreased, and in Lithuania, they almost stagnated (but at a level of + 5.87% compared to 2015). We mention that 2015 is the new reference year for the calculation of the specific economic indicators (replaced 2010).

*

  • Inflation in EU
  • Country           Dec 17             Jan 18             Monthly rhythm

*

Compared to the prices in 2015, it can be noticed that, at the end of the first month of 2018, Romania ranked only the 9th, in the context of the inflation levels in the European states. That means after Lithuania, Estonia, the Czech Republic, the UK, Hungary (all above 4%), Austria, Belgium and Latvia. Coming, though, from the 16th position at the end of 2017.

What price increases were in Romania, by Eurostat classification

To have a clearer picture of product and service types, with 12 categories observed by a methodology harmonized at the European level, instead of just three categories according to an older national methodology, still used as a reference, for technical reasons, we also the price increases by types of purchases and invoices.

Compared to the average of 2.66%, the value range by sections is quite large, between -4.13% for leisure and culture and up to + 7.61% for alcoholic beverages and tobacco. With food and non-alcoholic beverages very close to the overall average (+ 2.54%) and expenses for housing, water, electricity, gas and other fuel that are more than twice as high (+ 5.90%).

The price increase in Romania in January 2018 compared to the reference year 2015 by ECOICOP goods and services groups (used by the Statistical Office of the European Union – Eurostat)

*

  • Total
  • Foods and non-alcoholic beverages
  • Alcoholic beverages and tobacco
  • Clothing and footwear
  • Housing, water, electricity, gas and other fuel
  • Furniture, home appliances and house maintenance
  • Healthcare
  • Transport
  • Communications
  • Leisure and culture
  • Education
  • Restaurants and hotels
  • Other goods and services

*

Differences are quite high within the categories mentioned above. For example, for foods and non-alcoholic beverages, we have higher values for milk, cheese, eggs (+ 6.80%), fruits (+4.00%) and vegetables (+3.25%), but also price decreases in tea, coffee, cocoa (-3.34%) or mineral water (-2.21%).

Similarly, while prices of tobacco products have risen by 10.96% since 2015, they slightly decreased for alcoholic beverages (-0.33%, with -1.42% for spirit drinks). Significant differences also appear between price increases in electricity (+ 7.63%), on the one hand, and natural gas (0.85%) along with thermal energy (+ 0.50%), on the other.

Some situations are even funny, such as the case of the water supply of homes, where the -8.56% price decrease in the water supply was counterbalanced by an increase of +9.31% in the price of waste water collection. For the healthcare, the 1.20% average came from the price decrease in medical products and equipment (-1.30%), combined with the price increase in the out-patient medical services (+ 6.13%).

Finally, it is worth mentioning the situation in the communications sector, where the + 0.70% price increase is strongly based on the increase in the postal tariffs (+ 30.66%), while the telephone and fax equipment remain at quasi-constant prices (+ 0.04%) and the phone and fax services advanced by only + 0.25%.

The idea is that inflation appears to be related to some sectors and, within them, to certain products or services, whose evolution should be followed more closely. That, in order to discern how much of the price increase is part of the general trend and is explained by the cost and/or the quality increase, and how much appears as questionable, under special market conditions.

All in all, we should make the gradual transition from an approach limited to the national time horizon towards a European perspective. Which positions us more clearly within the union of states of which we are part and with which, sooner or later, in one form or another, our evolution will become more synchronized.

Mergeți în homepage ›

Publicat la data de 26.3.2018

Lăsați un comentariu


NEWS

Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

"We are working on a tax amnesty mechanism": announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult

AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%

The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult

Transport infrastructure in Romania needs EUR 70 billion - double as compared to existing resources

The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult

Refusal to work annuls entitlement to social assistance - bill voted in Chamber of Deputies

Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult

World Bank: Romania's economy could grow by 5.1% in 2018

Romania's economy could grow by 5.1% in 2018, according to the World Bank summer forecast. The estimate has been improved by 0.6 percentage points above… Mai mult

Ministry of Energy: Natural gas from Black Sea will be exported through Onesti - Isaccea - Negru Voda network

The Ministry of Energy issued for Transgaz the construction permit for the consolidation of the transport system between Onesti (Bacau) and Isaccea (Tulcea) and for… Mai mult