Romania’s annual inflation rate eased to 14.5% in March, from 15.5% the month before, the statistics institute INS announced on April 13. However, consumer prices increased by 1% in March vs February.
Food prices rose by 21.56% YoY in March 2023 and by 1.89% compared to the previous month, the same report said. Sugar registered the highest price hike – 60.91% YoY, followed by butter – plus 38.06%, potatoes – 36%, and eggs – 33%.
According to the new International Monetary Fund prognoses, Romanian economy will slow down from 4.6% in 2022 to 2.4% in 2023, and will grow to 3.4% next year.
As for inflation, IMF foresees that Romania will record an average annual increase of 10.5%, after an advance pf 13.8% in 2022. The price growth rate will significantly slow down in 2024, when it will reach 5.8%.
For Romania’s current account deficit, IMF expects only a slight drop from 9.3% of GDP in 2022 to 7.9% of GDP in 2023 and 7.7% of GDP in 2024.
At global level, IMF points out that preliminary signals at the beginning of 2023, according to which world economy will succceed a smooth landing by slowing down inflation and maintaining the growth rate, disappeared in the context of inflation which remained at a high level and turbulences hve appeared in the financial sector lately. In these conditions, according to the latest WEO report published on Tuesday,
IMF slightly reviewed its estimates referring to world economy this year. The basic IMF scenario is that after a 3.4% increase in 2022, the advance of world economy will slow down to 2.8% in 2023, 0.1% less than the January prognosis, to go up to 3% in 2024.
Global inflation will drop from 8.7% in 2022 to 7% in 2023, as a result of price drop for raw materials. However, IMF warns that core inflation will drop much slower. Moreover, the return of inflation to the target level is less probable to happen before 2025, in most cases.
IMF points out that risks about these prognoses are oriented downwards, in conditions in which the chances of a hard landing scenario have significantly grown. Stress in the financial sector could grow and spread, which would affect real economy through the deterioration of financial conditions and compelling central banks to reconsider the monetary policy. Moreover, war in Ukraine may intensify and lead to price increases for food and energy.
Central banks governors, finance ministers and participants in over 180 countries participate, starting on Monday, in Washington, in the spring meetings of IMF and the World Bank.
Romanians forced to add part-time jobs in light of inflation
