The slowdown in inflation in June confirms the beginning of a disinflationary trajectory, but does not mark the end of the inflationary episode, and the return to the National Bank’s 2.5% target remains a long-term process, believes Flavius Valentin Jakubowicz, vice president of the Association of Financial and Banking Analysts of Romania (AAFBR).
“Inflation slowed down in June, and this is a welcome sign. The annual rate fell to 10.4%, decelerating from the peak reached in May, and, from one month to the next, prices were practically stationary, with an advance of only 0.06%. Fuels became cheaper, and some vegetables and fruits became cheaper seasonally. It is, therefore, good news, but one that must be read with precision, because not all components of inflation move in the same direction. The slowdown comes, to a large extent, from base effects and from the moderation of energy and fuel prices, that is, the exact areas that pushed inflation up in the last year. As the energy shock of the summer of 2025, especially the increase in the price of electricity after exiting the capping scheme, gradually leaves the basis of comparison, we can expect the annual rate to continue to fall in the second half of the year. However, it is largely a statistical disinflation, not necessarily a relaxation of underlying pressures”, Flavius Valentin Jakubowicz told Agerpres.
He mentioned that the part that remains uncomfortable is that of services. Here prices are increasing by almost 14%, rents by over 40%, and local utilities by about 16%.
The President of AAFBR claims that it is inertial inflation, which reflects wage costs and expectations already incorporated in prices and which is slowly correcting.
“My conclusion is that June confirms the beginning of a disinflation trajectory, but not the end of the inflationary episode. Returning to the National Bank’s 2.5% target remains a long-term process, which depends less on energy and more on tempering inflation in services and anchoring expectations. Until then, prudence in monetary policy and predictability in fiscal policy are necessary”, stated Flavius Valentin Jakubowicz.
The annual inflation rate decreased to 10.42% in June, from 10.85% in May, as services rose by 13.67%, non-food goods by 12.29%, and food goods by 5.75%, according to data published on Monday by the National Institute of Statistics (INS).