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Romania is among the EU countries where inflation has dropped in March
The annual rate of inflation in the European Union has dropped in March to 8.3% from 9.9% in February, as in 25 member states, among which Romania the indicator of consumption prices has dropped from one month to another, show the data published on Wednesday by Eurostat.
In March, the EU member states with the highest rates of inflation were Hungary (25.6%), Latvia (17.2%) and the Czech Republic (16.5%). At the other end, the EU member countries with the lowest rates of inflation were Luxembourg (2.9%), Spain (3.1%) and the Netherlands (4.5%).
As compared to February 2022, the annual rate of inflation dropped in 25 member states, including Romania from 13.4% to 12.2% and went up in two states.
In the euro zone, the annual rate of inflation dropped from 8.5% in February, down to 6.9% in March. In exchange, the Eurostat data show that core inflation, namely what is left after prices for volatile goods, such as energy and food are taken out, continued to grow to 7.5% from 7.4% in February. Another indicator which, besides the prices for energy and food, excludes prices for cigarettes and alcohol, has increased to 5.7% from 5.6% in February.
Core inflation is the indicator followed by BCE to establish its decisions for monetary policy. The main worry of BCE is that services inflation, which in the case of euro zone was 5.1% is much too high and could signal the fact that salaries become an important issue as the prices for services are determined mainly by the workforce costs. Another worry of BCE is that inflation for food continues to accelerate and has an over dimensional impact on the perception of inflation by consumers, which could modify the purchase behavior and generate request for salary increases.
In case of Romania, the National Institute for Statistics (INS) has previously informed that the annual rate of inflation dropped at 14.53% in March 2023, from 15.5% in February 2023, as the food got more expensive by 21.56%, the non-food by 11.06% and services by 10.83%.
According to the quoted source, the harmonised indicator of consumption prices in March 2023, as compared to February 2023, is 100, 85%. The annual rate of inflation in March 2023 as compared to March 2022 calculated on the basis of harmonized indicator of consumption prices (IAPC) is 12.1%.
The National Bank of Romania expects that the annual rate of inflation drop faster than anticipated, especially starting with Q3 of this year, due to the extension of ceiling schemes and compensation for energy prices until 31 March 2025 and redefinition of their characteristics starting with 1 January 2023.