Romania’s factory-gate inflation eases to 8.8% y/y in July

The industrial production price index, also known as factory-gate price inflation, eased to 8.8% y/y (+0.7% m/m) in July from double-digit readings in May-June, driven by base effects. Factory-gate price inflation accelerated in H2 last year following the liberalisation of electricity prices and, more recently, amid the war in the Middle East – both episodes pushing energy prices to levels not seen since the first stage of the war in Ukraine.

The moderation of producer-price pressures parallels the recent softening of consumer price inflation, which has also benefited from base effects. The National Bank of Romania has nevertheless raised its full-year inflation forecast to 6.1%, on expected elevated fuels and electricity prices, with consumer inflation not expected to return to the central bank’s target range of 2.5% plus or minus 1 percentage point before the end of 2027.