BCR sees inflation jumping to 7.5% after the first fiscal package. 5 pragmatic tips to protect your money when you are dealing with such inflation

The BNR will maintain the interest rates unchanged at the August 8 meeting, says BCR's chief economist, Ciprian Dascălu, in a note sent to investors and consulted by HotNews.ro.

The increase of VAT quotas and excise duties at the beginning of August increased the uncertainty regarding their transmission on consumer prices, which would cause the NBR to wait at least until the first quarter of 2026 to relax the monetary policy.

The press release that will be presented at the press conference of the inflation report should mention the growing review of the short -term inflation prospects, the document shows.

Inflation has been exceeded the previous estimates of the Central Bank, and the BNR scenario on increasing electricity prices after the expiration of the ceiling in July could prove quite optimistic, says Ciprian Dascălu.

BCR estimates a general inflation of 7.5% at the end of the year, assuming a moderate increase in electricity prices in July, of about 30%, a 60% transmission of VAT growth and a transmission of 100% of the increase of excise duties.

The fiscal adjustment will lead to a correction of the commercial deficit, reducing the depreciation pressure of the leu and leaving more space for the NBR to reduce the interest rates, Dascălu notes.

Although the economy will probably grow well below the potential in the next four quarters, we do not expect to reduce interest rates until there is no more clarity on inflation prospects and a high degree of confidence that inflation will reach the target interval during the monetary political horizon, the BCR report shows. This is unlikely to happen earlier than February 2026, however.

What happens to your money to an inflation of 7.5%:

An inflation of 7.5% means that, on average, the prices of goods and services in an economy increased by 7.5% compared to the same period of the previous year. Basically, if a product costs 100 lei last year, it would now cost 107.5 lei.

Purchase power decreases: Your money buys less than a year ago because prices have increased.

Salaries and economies are at risk: If salaries and interest rates do not increase at least at least at the same rate as inflation, buying power and real wealth decrease.

Impact in everyday life: Essential products such as food, utilities and transport become more expensive, which affects both households and business.

Economic signal: Such a high level of inflation is usually a sign of economic pressures, such as increasing the costs of raw materials, problems in supply chains, higher taxes (for example VAT growth) or devaluation of the national currency.

In conclusion, an inflation of 7.5% erodes the value of money and can have significant effects on personal finances and on the general level.

How can you protect your money when you are dealing with a 7.5%inflation?

In order to protect your money in a period with an inflation of 7.5%, you need to focus on strategies and assets that can maintain or even increase the purchasing power of your money. Here are the most effective approaches:

1. Avoid holding too much cash

• The money kept in cash quickly loses their value in high inflation conditions if they do not get sufficient interest. Keep in cash only as much as you need for emergencies (usually 3-6 months of expenses). The additional amounts can be directed to better yield options.

2. Carefully choose savings accounts

• Use high interest rate savings or deposits to obtain better yields for short -term savings. Even if many interests are under inflation, you still preserve your money better.

3. Buy shares companies from certain sectors

Actions, especially those in sectors such as consumer goods, utilities, health or energy, allow you to benefit from the power of companies to transfer increased costs to consumers and distribute dividends. These companies face inflation better than others.

4. Diversifies by investments in goods and gold

• The goods (energy, agricultural goods) and precious metals, such as gold, have provided an inflation protection historically. You can easily invest through specialized funds or ETFs.

5. Minimizes or avoids variable interest debts

• It pays the expensive loans, especially those with variable interest, because inflation can lead to the rapid increase of interest rates, increasing the cost of reimbursements.

Using these strategies, you can protect your economies and increase your investments so that your wealth keeps up or even exceed the high inflation. Reviewing and regular adjustment of portfolio are the key to keeping and increasing the value of money in an inflationary environment.