The industrial production price index, also known as factory-gate price inflation, eased to 8.8% y\/y (+0.7% m\/m) in July from double-digit readings in May-June, driven by base effects. Factory-gate price inflation accelerated in H2 last year following the liberalisation of electricity prices and, more recently, amid the war in the Middle East \u2013 both episodes pushing energy prices to levels not seen since the first stage of the war in Ukraine.<\/p>\n
The moderation of producer-price pressures parallels the recent softening of consumer price inflation, which has also benefited from base effects. The National Bank of Romania has nevertheless raised its full-year inflation forecast to 6.1%, on expected elevated fuels and electricity prices, with consumer inflation not expected to return to the central bank\u2019s target range of 2.5% plus or minus 1 percentage point before the end of\u00a0\u00a02027.<\/p>\n
Prices in the oil refining industry rose by 5.48% m\/m and 44.86% y\/y in July. Prices in this industry were 66% above their 2021 average, broadly in line with the overall increase in industrial prices.<\/p>\n
Overall, energy prices (electricity, gas and heating) decelerated on base effects to 10.0% y\/y in July from above 20% y\/y during Q2, but remain elevated. The tight electricity market expected this autumn is likely to generate further inflationary pressures. Average energy prices were 157% above their 2021 average in July.<\/p>\n
Prices of durable and non-durable consumer goods rose at relatively moderate rates of 3.3% y\/y and 5.0% y\/y, respectively, in July. They were 36% and 51% above their 2021 averages, respectively, indicating below-average growth in this segment.<\/p>\n
However, prices of intermediate goods rose by 11.4% y\/y, reaching 42% above their 2021 average. The annual increase accelerated from 10.2% y\/y in June, 9.1% y\/y in May, and 5.1% y\/y at the end of last year, generating further pressure on consumer prices.<\/p>\n