Energy and fuels account for 49% of the “inflation basket”. The price of oil will affect the pace of the Romanian economy
Romania's economy is facing a period of high inflation, and a further rise in oil prices will put additional pressure on domestic prices and may slow economic growth, analysts say.
A new wave of oil price increases may affect the pace of the Romanian economy. Photo by Shutterstock
The sensitivity of the consumer price index (CPI) in Romania to the energy markets has an important value, since a permanent increase of 10% in oil prices also implies an increase of 0.3 percentage points in annual inflation.
It is therefore a phased dependency relationship, say XTB analysts, arguing that the immediate impact occurs through high fuel prices at the pump in the first year, followed by knock-on effects in the following year as transportation and industrial production costs ripple through the supply chain.
These knock-on effects are particularly strong, analysts say, because the non-food goods category, which includes energy and fuel, has a substantial 49% weight in the inflation “basket”.
How the inflation rate would respond to a possible further jump in oil prices
If the average price of Brent oil were to rise to $100 per barrel, a more than 40% increase in acquisition costs would be generated. Thus, it is estimated that this change will add approximately 1.29 percentage points to the annual inflation rate in Romania, the analysts explain.
In addition, they add, a scenario in which oil could reach $120 per barrel highlights a critical risk. Such an increase could deviate inflation forecasts by up to 1.5 percentage points, with the potential to force the National Bank of Romania (BNR) to adopt a more drastic monetary stance to counter these external shocks.
Similar effects are estimated in other European economies, but their magnitude differs depending on the structure of each market, analysts note, giving the example of the Czech Republic, where an oil price shock could add between 0.2 and 1.9 percentage points to inflation and reduce the pace of economic growth. Compared to Germany, the impact on the Czech economy is estimated to be stronger due to a higher dependence on oil. This difference shows that vulnerability to such external shocks is directly influenced by economic structure and energy consumption.
The exchange rate and high inflation are holding back the economy
Although oil is a global commodity quoted in dollars (USD), the RON exchange rate acts as a secondary lever for domestic inflation.
“The “pass-through” effect has evolved a lot since the beginning of the transition period, when currency depreciation had a pass-through rate of 60% to 70%. In the current context, it has stabilized at a maximum of 25%, indicating a more mature monetary framework and increased resilience of domestic production”it is also shown in the analysis.
According to her, the NBR strategy of “controlled floating”, through interventions aimed at limiting sudden fluctuations, remains vital for the economic stability of the country. Because energy imports are largely denominated in dollars, any sudden depreciation of the RON would accentuate the negative effects of rising oil prices, creating a “double whammy” on the CPI that would be difficult for households to absorb.
Romanians tightened their belts for two consecutive months: consumption also fell in February
High inflation erodes consumption
On the other hand, analysts claim, the persistence of high inflation, in the period 2022-2026, has gone from a temporary problem to a structural brake on GDP (Gross Domestic Product) growth, the mechanisms of this slowdown being mainly determined by the erosion of consumption.
“High inflation erodes household purchasing power, and in an economy where private consumption is the main driver, this leads to a cooling of economic activity. In addition, rising operating costs act as a tax on industrial output, reducing profit margins and discouraging the capital investment needed for long-term growth.”
Romania's path to price stability remains closely linked to global energy trends. Although the NBR can manage currency volatility to some extent, “imported inflation” from the oil sector remains an external variable that continues to test the resilience of domestic private consumption, as well as global real GDP growth. An analysis carried out at the beginning of 2026 by S&P Global highlighted the fact that severe oil price shocks could contribute to a contraction of up to 1% of Romania's GDP”, concludes Radu Puiu, financial analyst at XTB Romania.
The Romanians are tightening their belts
Romanians tightened their belts for two consecutive months, with consumption falling in February by 7.6%, after a 9.1% decline in January compared to the same period last year, according to data from the National Institute of Statistics (INS).
Specifically, in February 2026, Romanians bought 10.7% less non-food products than in February 2025, also reducing the purchase of fuels by 9.8% (although the war in Iran broke out on February 28), the purchase of beverages and food being reduced by 2.3%.
Consumption dropped dramatically in Romania, without any connection to the war in Iran, as evidenced by official statistical data: in January 2026, Romanians made 9.1% fewer purchases than in January last year, only sales of non-food products falling by 11.3%, and those of food, beverages and tobacco by 3.9%.
“We have a decrease in consumption in January 2026 of 9.1% compared to January 2025. That's a huge drop. I don't think we can have economic growth of 1%”, said economic analyst Adrian Codîrlașu (CFA) for “Adevărul”.
“I repeat, as shown by consumption there is a very high risk of recession. We will also see the effects of the war in the Middle East, with the price of fuel in March. Energy prices will also increase, and all this is reflected in prices, which they will further affect consumption and increase inflation further,” he explained.
