The annual inflation rate will increase by the end of 2026 and exceed the 6.1% previously forecast by the National Bank of Romania, according to the minutes of the monetary policy meeting on October 8, published on Tuesday, October 20.
Members of the BNR Board of Directors said the new economic data indicate a deterioration in the short-term inflation outlook compared with the estimates presented in August. The previous forecast anticipated an annual rate of 6.1% in December 2026, followed by a gradual decline to 2.8% in June 2028.
New factors, particularly the rising fuel and energy prices, higher raw material prices, and movements in the leu exchange rate, may lead to increased inflation.
“Board members noted that, according to the new data and analyses, the annual inflation rate will follow an upward trajectory until the end of the current year, thus exceeding the figures in the medium-term forecast from August 2026, which anticipated it reaching 6.1% in December 2026 and subsequently declining to 2.8% in June 2028,” the document stated, cited by Digi24.
The central bank warned that a prolonged conflict in the Middle East could intensify inflationary pressures, including through higher prices for imported goods. Developments in international oil and raw material markets therefore continue to represent a significant source of uncertainty for Romania’s economy.
“At the same time, it was agreed that the balance of risks induced by supply-side factors remains tilted upward in the short term, particularly given the uncertainties surrounding the prices of crude oil and other raw materials in the context of the prolonged conflict in the Middle East, as well as their potential direct and indirect effects domestically, including through the prices of certain imported intermediate and finished goods,” according to the document.
However, there are also factors that could limit price increases. Board members highlighted the favorable results recorded this year in certain crop production sectors, with positive effects on the prices of vegetables, fruit, and eggs, as well as other agri-food products. At the same time, developments in household consumption and economic demand could moderate the pass-through of higher energy and fuel costs to the prices of goods and services.
In its analysis of recent developments, the BNR highlighted the significant decline in the annual inflation rate during the first two months of the third quarter, from 10.42% in June to 6.17% in August 2026, as the direct effects of the removal of the electricity price cap and the increases in VAT rates and excise duties introduced the previous year faded.
At the same time, the annual CORE2 adjusted inflation rate, an indicator that excludes a range of volatile and administered prices from the calculation, fell from 8.3% in June to 6.2% in August. This development was driven by slower increases in processed food prices and a moderation in price rises for non-food goods and services.
At its meeting on October 8, 2026, the BNR Board of Directors unanimously decided to keep the monetary policy rate at 6.50% per year. The interest rate on the lending facility (Lombard) was also maintained at 7.50% per year, while the rate on the deposit facility remained at 5.50% per year.
In a separate analysis presented the same day at a conference organized by Coface Romania, analysts said that Romania’s economic growth in 2027 could be between 0.5% and 2%.
“The overall picture is one of moderate optimism, also taking into account the economic growth outlooks recently provided by both the International Monetary Fund and the European Commission, and the message from discussions with investment firms is that, more likely, we will have economic growth of around 2% next year. This is somewhat close to the economic growth outlooks for Poland, Hungary, and the Czech Republic as well. Therefore, we are broadly following the regional trend,” said Florian Neagu, director within the Financial Stability Department of the National Bank of Romania (BNR), cited by Economedia.
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