The alarm signal of the economists: Four waves of increases will hit Romania. When the first one comes

The economic situation of Romania has been aggravated lately by the depreciation of the leu and the increase of interest, which will soon be transposed into the prices from the shelf, and not by a single wave of increases, but in four, explained for the “truth” the analyst Adrian Negrescu.

An analyst Adrian Negrescu warns that four waves of increases come. Photo archive

“The fact that the inflation rate was maintained in April to 4.9% only represents Calm before the storm. The following months will probably bring four waves of price increasesthe first to feel it in the following weeks ”he told “truth“Analyst Adrian Negrescu.

According to him, the first wave of increases will be generated by the depreciation of the national currency.

“As the euro has passed by 5 lei, all imported products will become more expensive by at least 5%, only for this reason. From food to electronics, appliances, clothing and footwear, all will be expensive with the exhaustion of existing stocks at the moment. 5% is an optimistic estimate that does not take into account the effects of depreciating the course throughout the business chain, especially in the food area where beyond the finished products, we also import a wide range of raw materials whose increase will be found in the shelf prices ”, Negrescu pointed out.

According to him, the first wave of increases, generated by the depreciation of the course, will take inflation from May to 5%. “However, in the summer, other increases await us, the second wave being generated by the increase in energy price. If the companies would pay a capped price of 1 leu/kWh, from July they will pay for at least 50 money, and this will translate into chain increases in the economy. A third wave of price increases could be generated by the liberalization of gas price. The European Commission sent us a last warning that in 60 days we will give up the administered price, valid until the spring of next year, otherwise we risk freezing our EU funds ”he added.

In his opinion, a fourth wave of increases could be generated by the increase of VAT and excise duties, in the desperate attempt to reduce the budget deficit.

“If the VAT will increase to 21% and the reduced VAT quotas will be eliminated, the Romanian economy will be the victim of the largest expensive wave of 2025. Essentially, it is not excluded that in the autumn we see inflation at 8%, and that will mean that we will pay with the top and the payment note of political instability. The ceilings of any kind have proven harmful to the economy and we will feel the results in your own pocket“, Added Negrescu.

We recall that the lion had been massively depreciated last week, from 4.97 to 5.12 lei, and ROBOR at 3 months, depending on which the loans rates in lei are calculated has increased from last week to 5.9% to 7.31%, which will be translated in higher rates for Romanians who have loans, but also the expensive of the surgery, the services.

The NBR spent six billion euros to mitigate the depreciation of the lion, against the background of political instability, which represents about 10% of the total foreign exchange reserve.