The annual inflation rate will record a modest decrease in the next three quarters and on a fluctuating trajectory and significantly higher than that in the previous projection, according to a press release from the National Bank of Romania.
The NBR Board of Directors analyzed and approved, in its meeting on Wednesday, the Inflation Report, November 2025 edition, a document that incorporates the most recent data and information available.
According to the forecast in the Report, the annual inflation rate will record a modest decrease in the next three quarters, and on a fluctuating trajectory and significantly higher than that in the previous projection, amid the direct transitory effects above expectations exerted by the expiration on July 1 of the electricity price cap scheme and the increase starting with August 1 of VAT and excise duty rates. It will, however, experience a steep downward correction in Q3 2026, once the direct effects of the two supply-side shocks have been exhausted, and will then resume its decline, albeit at a slower pace than previously forecast and from a relatively higher level, re-entering Q1 2027 and falling slightly within the target range until the end of the projection horizon, given the intensification of disinflationary pressures in the aggregate demand deficit; it is expected to increase somewhat more markedly compared to the previous projection, in the context of the packages of corrective fiscal and budgetary measures implemented starting in August 2025, according to Agerpres.
According to the NBR, uncertainties remain, however, associated with the measures that will probably be adopted in the future in order to continue budgetary consolidation in accordance with the Medium-Term Budgetary and Structural Plan agreed with the EC and the excessive deficit procedure.
Significant uncertainties and risks to the outlook for economic activity, and thus the medium-term evolution of inflation, continue to come from the external environment, given, on the one hand, global trade tensions and the war in Ukraine, and, on the other hand, plans to increase spending on defense and infrastructure investments in EU countries.
In this context, the absorption and maximum use of European funds, mainly those related to the Next Generation EU program, are essential for partially offsetting the contractionary effects of budgetary consolidation and geopolitical/trade conflicts, as well as for carrying out the necessary structural reforms, including the energy transition.
The monetary policy decisions of the ECB and the Fed, as well as the attitude of central banks in the region, are also relevant.
Based on the assessments and data currently available, as well as in the context of high uncertainties, the Board of Directors of the National Bank of Romania decided in its meeting on Wednesday, November 12, 2025, to maintain the monetary policy interest rate at 6.50% per annum. At the same time, it was decided to maintain the interest rate for the lending facility (Lombard) at 7.50% per annum and the interest rate for the deposit facility at 5.50% per annum. The Board of Directors of the National Bank of Romania also decided to maintain the current levels of the minimum reserve requirements for lei and foreign currency liabilities of credit institutions.