Annual Inflation Rates in the European Union
In June, the annual inflation rate in the European Union was 2.6%, a slight decrease from 2.7% in May. Romania, which had the highest inflation rate in the bloc for five months, was surpassed by Belgium last month, according to data published on Wednesday by the European Statistics Office (Eurostat).
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In June, the EU member states with the lowest annual inflation rates were Finland (0.5%), Italy (0.9%), and Lithuania (1%). On the other hand, the EU member states with the highest inflation rates were Belgium (5.4%), Romania (5.3%), Spain, and Hungary (both at 3.6%), as reported by Agerpres.
Compared to May 2024, the annual inflation rate decreased in 17 member states, including Romania, from 5.8% to 5.3%, remained stable in one country, and increased in nine states.
Romania – The Largest Exporter of Cereals in the EU
In the Eurozone, the annual inflation rate stood at 2.5% in June, down from 2.6% in May. The price growth rate for services remains high (1.84 percentage points (pp) in June), followed by prices for food, alcoholic beverages, and tobacco (0.48 pp), industrial products (0.77 pp), and energy (0.02 pp). Eurostat data shows that core inflation, which is what remains after volatile goods prices such as energy and food are removed, decreased to 2.8% in June from 2.9% in May. Another indicator that, in addition to energy and food prices, also excludes prices for tobacco and alcohol, rose to 2.9% in June, similar to the previous month’s level. Core inflation is closely monitored by the ECB in its monetary policy decisions.
Decrease in Inflation Rate in Romania
The National Institute of Statistics (INS) of Romania has recently reported that the annual inflation rate decreased to 4.94% in June 2024, down from 5.12% in May. This decrease was influenced by a 1.10% increase in food prices, a 6.28% increase in non-food prices, and an 8.81% increase in services prices.
According to the same source, the harmonized index of consumer prices in June 2024 compared to May 2024 was 100.06%. The annual inflation rate in June 2024 compared to June 2023, calculated based on the harmonized index of consumer prices (HICP), was 5.3%. The average rate of change in consumer prices over the last 12 months (July 2023 – June 2024) compared to the previous 12 months (July 2022 – June 2023) based on the HICP was 7.3%.
The National Bank of Romania (BNR) has revised its inflation forecast for the end of this year to 4.9%, up from the previous 4.7%, and anticipates that it will reach 3.5% by the end of 2025, according to data presented last month.
The resignation of BNR Governor, Mugur Isărescu
Mugur Isărescu, the long-standing Governor of the National Bank of Romania, has announced his resignation from the position. This decision comes after years of dedicated service to the country’s financial sector.
During his tenure, Isărescu implemented various policies aimed at stabilizing the economy and ensuring the stability of the national currency. His leadership has been praised for steering the country through challenging economic times.
The search for a new Governor will now begin, as Romania looks to continue its economic growth and stability in the years to come.
