Romanian households’ purchasing power has deteriorated in July, both as a result of slower nominal advance (+5.2% y/y, the weakest in four years) but also because of a sharp rise in inflation (7.68% y/y) following the VAT rate hike, according to data published by the statistics office INS. The average net wage dropped by 3.0% m/m and 2.4% y/y to RON 5,517 (EUR 1,088, +3.2% y/y) in July.
The government forecasting body CNP expects the average wages in Romania to rise more slowly than inflation in 2024 and 2025, resulting in a gradual deterioration of the average real wages by 0.4% y/y this year and 0.3% y/y in 2026.
The inflationary shock prompted by the electricity market liberalisation in August, higher VAT rates and excise duties enforced as of August, and enhanced inflationary expectations will contribute to the gradual deterioration of the households’ purchasing power – while freezing the public wages and pensions over two entire years (2025-2026) will have a negative impact.
The wages in the private sector are also expected to see slower nominal growth amid a fragile economic context. Even if inflation were to subside in the second half of 2026, the impact of double-digit inflation over the two years would have a tough impact on the employees in the budgetary sector and public pension recipients and generate social pressures.
Over the past five years, the real wages in Romania have increased moderately, particularly in 2023 and 2024. But the local currency’s strengthening had an impact on the demand for imported goods and tourism services.
While the wages, as of July, are 15% above the 2019 average in real terms, they were 67% higher when expressed in euros.
As of July 2025, the wages in the three main budgetary sectors (public administration, education, and health) already posted negative annual real growth rates of -7.5%, -7.0% and -5.0%. The wages in the public administration and education sectors have remained virtually flat compared to July 2024, while the health sector (which also includes private medical services providers) posted on average 5.1% y/y advance, most likely concentrated in the growing private sector.
In manufacturing, the average net wage rose above average by 8.7% y/y, resulting in a positive growth rate of 0.7% y/y. The fastest growing wages were in the manufacturing of transport equipment: 12%-13% y/y nominally, resulting in a significant 4%-5% y/y real advance. The paper and paper products manufacturing also posted robust rates of +14.4% y/y, pr +6.0% y/y in real terms.
The wages in construction, IT, and HoReCa have increased over the past year at rates inferior to the headline inflation – which eroded employees’ purchasing power in these sectors.
The steepest advance, +28.5% y/y, was in the financial services sector (+19.1% y/y in real terms), where the average net wage reached RON 7,340.
iulian@romania-insider.com
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