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Romania Inflation May 2023

Romania: Inflation declines to lowest level since March 2022 in May

Inflation dropped to 10.6% in May, below April’s 11.2%. May’s result represented the weakest inflation rate since March 2022. The reading was largely driven by a slower increase in prices for both food and non-food items. That said, price pressures in the services sector increased.

Accordingly, the trend pointed down, with annual average inflation coming in at 14.7% in May (April: 15.0%).

Lastly, consumer prices rose a seasonally adjusted 0.64% from the previous month in May, moderating from the 0.75% rise recorded in April. May’s result marked the weakest reading since January.

This year, inflation will continue to decelerate but remain elevated nonetheless. Energy cost stabilization measures, base effects and the feed-through of higher interest rates into the economy will cause price pressures to moderate going forward. Moreover, the government has planned an emergency degree which, if implemented, would cap retailers’ commercial margins for basic food items over the next three months. That said, strong wage growth—which outpaced inflation in April—could further stoke price pressures.

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