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Romania Inflation January 2023

Romania: Inflation falls to the lowest level since July 2022 in January

Inflation came in at 15.1% in January, down from December’s 16.4%. January’s reading marked the weakest inflation rate since July 2022 and was well below market expectations. Looking at the details of the release, prices for food and services rose at a faster rate in January, while prices for non-food goods increased at a more moderate pace. Despite the sharper-than-expected slowdown, core inflation accelerated to 14.9% in January to 14.7% in December, suggesting that demand-side pressures on prices remained strong.

Annual average inflation rose to 14.3% in January (December: 13.7%).

Finally, consumer prices increased a seasonally adjusted 0.34% from the previous month in January, following December’s 0.37% rise. January’s result marked the softest rise in prices since November 2021.

On the outlook, Dorina Ilasco from Erste Group commented:

“Today’s CPI reading does not change our view that headline inflation is likely to remain elevated in the short term (near or above the 15.0% y/y), before falling sharply (-3pp) at the beginning of the second quarter due to a strong energy-related statistical base effect and ending the year at 8.0% y/y. […] Core inflation is projected to hover near the 15.0% in February this year, remain in double-digit territory until the last quarter of this year and stay above headline inflation over the entire projection horizon.”

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