Romania\u2019s headline inflation remained steady at just under 4.9% y\/y in April, in line with consensus expectations, as the average prices increased by a mere 0.07% in the month, according to the data published by the statistics office INS on May 13. Core inflation remained at 5.3% y\/y as well.<\/p>\n
The National Bank of Romania (BNR) is expected to keep the monetary policy rate at 6.5% at its May 16 monetary board meeting, while expectations about the next rate cut range from August to after the end of 2025.<\/p>\n
A weaker currency outlook or only expectations for frontload currency depreciation, prompted by the episode on the FX market last year, encouraged upward revisions of the inflation forecast.\u00a0<\/p>\n
Thus, Erste Research has revised its yearend forecast upward from 3.7% to 4.0%, while BNR will most likely publish early next week, along with the quarterly Inflation Report.\u00a0<\/p>\n
Erste also revised the end-2026 inflation forecast to 3.4% from 3.0%. Core inflation is expected to be above headline inflation throughout the period. Notably, the projection is drafted under a no-change tax scenario, while a tax revision (not necessarily a VAT tax hike) is almost certain after the presidential elections on May 18.<\/p>\n
April\u2019s modest overall price increase masked diverging trends across categories. Food prices rose by 0.83% m\/m, pushing annual food inflation to 5.6% y\/y. In contrast, non-food items recorded a 0.65% m\/m monthly decline – mainly due to lower natural gas prices – resulting in a 3.5% y\/y.\u00a0<\/p>\n
Service prices grew by 0.48% m\/m in April and by 6.8% y\/y, with utility tariffs increasing 1.1% from March and 12.6% compared to April 2024.<\/p>\n