Radio România Internațional

Tag: price-hikes

  • Fiscal and budget changes

    Fiscal and budget changes

    The good news is that, for some Romanians, the second half of 2024 will apparently be easier. The bad news is that living costs are actually going up for everyone. As of July 1, a series of fiscal changes decided by the government take effect, from the increase of the national minimum wage to the increase of excise duties on fuel or the decrease of the index used to calculate bank interest rates. Overall, over 1.8 million employees benefit from the effects of the increase in the gross minimum wage starting July 1, from 3,300 to 3,700 Lei. The net increase for the 760 thousand workers earning minimum wages is 284 Lei, tantamount to some 57 EUR. To make sure no income is affected by the new salary scale, lawmakers eliminated the 4,000 lei threshold taken into account for granting meal vouchers or food allowances.

     

     

    Also starting July 1, loan rates in national currency will slightly go down as a result of the decrease in the reference index for consumers, known as IRCC – from 5.9% to 5.86%. However, this decrease will not greatly impact the monthly rates of loan holders, economic pundits say. It will only be a four to five lei decrease, depending on the balance. The second semester also comes with an increase in excise duties on fuel, an annual measure stipulated in the Fiscal Code, which seeks to update fuel costs in line with the inflation rate. As a result, according to the Competition Council app, one liter of standard gasoline sold between 7.42 and 7.56 Lei in Bucharest on Monday morning, accounting for an average increase of approximately 0.40 Lei, a difference that also applies to Diesel. Some filling stations already increased fuel prices last week. The media expects filling stations will continue to increase prices, all the more so since the demand for fuel goes up during the summer season. The price for oil, experts recall, accounts for only a small share of the price of fuel. Nearly half of the price is represented by taxes and excises, and right now, the budget deficit is quite large, threatening to increase and lawmakers rely on budget revenues.

     

     

    Starting July 1, natural gas bills will also go up, as the National Energy Regulatory Authority (ANRE) last week approved an average 19% increase in distribution tariffs. Economic pundits say the increase in fuel excises and gas bills will have a domino effect and will inevitably lead to higher prices across the board, from food to vacations. (VP)

  • June 30, 2024 UPDATE

    June 30, 2024 UPDATE

    OSCE PA – The 31st session of the Parliamentary Assembly of the Organization for Security and Cooperation in Europe continues in Bucharest. Until Wednesday, MPs from over 50 states will be discussing the war in Ukraine. Participants have called for peace, stability and the observance of international regulations. Artificial intelligence, climate change, combating drug and human trafficking as well as migration are other topics high on the agenda for talks.

     

     

    TALKS – The government has announced talks with political parties on Monday and Tuesday regarding the timetable for the presidential and parliamentary elections due this year. On Friday, Social-Democrat Prime Minister Marcel Ciolacu said he will invite party leaders to discuss the presidential election timetable, arguing that „shenanigans” on this topic affect trust between partners and must thus cease. The ruling coalition partners PSD and PNL failed to reach an agreement on the date of the presidential election. The Liberals want the election to take place towards the end of the year, in November-December, while the Social-Democrats insist the original period, September, be maintained. We recall local and European Parliament elections were held on June 9.

     

     

    PRICE HIKES – July 1 will bring new price hikes, experts say. The excise duty for fuel will go up, which will spell an additional 0.43 RON increase for gas and 0.4 RON for Diesel. Prices for fuel have already gone up in certain filling stations. Gas currently sells for 6.99 up to 7.06 RON, while Diesel prices vary between 7.13 RON and 7.19 RON per liter. Also starting July 1, natural gas bills are also expected to go up, after the National Energy Regulatory Authority (ANRE) adopted an average 19% increase in distribution costs. Meanwhile, the national minimum wage will go up from 3,300 to 3,700 RON on Monday, spelling a net increase of approximately 57 EUR.

     

     

    FITS – Seven outstanding personalities from the world of arts were awarded stars on the Walk of Fame in Sibiu, on the last day of the International Theatre Festival in Sibiu (FITS) on Sunday. Among them, French actress Isabelle Adjani, American actor John Malkovich and Norwegian playwright Jon Fosse, the recipient of the 2023 Nobel Prize for Literature. One of the biggest and most important theater and performing arts festivals in the world, the International Theatre Festival in Sibiu opened on June 21, and brought to the public 830 related events, involving 5,000 artists from 82 countries. This year’s edition also included an extensive French presence, marking 100 years of existence for the French Institute in Romania, as well as an extensive Polish contribution, including a preview of the 2024-2025 Romania-Poland Cultural Season.

     

     

    MESSAGE – Romanian Orthodox Church Patriarch Daniel on Sunday conveyed a message in response to the election of a new Patriarch of the Orthodox Church in neighboring Bulgaria, expressing confidence the high hierarch will help defend and promote Christian values ​​in the modern world. Aged 52, Metropolitan Daniil of Vidin, was elected Patriarch of Bulgaria, succeeding the charismatic Neophyte, who passed away in March. A member of the EU and NATO, Bulgaria is close to Moscow in historical, cultural and religious terms. Relations with Russia have been strained since the start of the Russian invasion of Ukraine. Over two thirds of Bulgaria’s population is Orthodox.

     

     

    WIMBLEDON – Romanian tennis players enrolled in the women’s singles at Wimbledon will take on tough opponents in the opening round. Gabriela Ruse (152 WTA) will take on Elena Rybakina of Kazakhstan (4 WTA), the 2022 champion. Jaqueline Cristian (62 WTA) will go up against Bianca Andreescu of Canada (165 WTA). Anca Alexia Todoni (141 WTA), who has qualified to the main draw for the first time in her career, will play Elisabetta Cocciaretto of Italy (41 WTA). Irina Begu (127 WTA) will take on Lin Zhu of China (60 WTA). Ana Bogdan (50 WTA) will play Cristina Bucșa of Spain (63 WTA). Sorana Cîrstea (29 WTA and seeded 29th) will play Sonay Kartal of Great Britain (295 WTA). Romanian-born British player Emma Răducanu (168 WTA), the beneficiary of a wild card, will play Ekaterina Alexandrova of Russia (22 WTA and seeded 22nd). (VP)

  • Lower prices for basic food stuffs

    Lower prices for basic food stuffs


    Romania is one of the European countries which has this
    year put a cap on some basic food stuffs. An emergency ordinance came into
    effect on August 1st to enforce a temporary measure of fighting
    price hikes in some farm and food products. The ordinance, which is valid for
    three months, is focusing on capping prices in several food products such as
    bread, milk, meat, vegetables, fruit with a view to boosting the population’s
    purchasing power.


    The discount, which had been previously discussed with
    processors, distributors and traders, was initially envisaged for 14 products.
    According to data released by the Ministry of Agriculture and Rural
    Development, a survey on prices in supermarkets shows that significant price
    cuts are registered in several products such as, bread, edible oil, potatoes,
    cheese, maize, flour and sugar


    Agriculture minister Florin Barbu has recently said the ordinance on capping the
    trade markup will be extended. Barbu added that funding is presently available
    for projects both in the field of processing and the producers’ energy
    independence.


    Food and farm products
    in Romania have a VAT of 9%. Producers aren’t going to lose because the VAT on
    production expenses is higher, as there is going to be compensation the
    minister went on to say.


    The Ministry’s project
    points out to the government’s summer decision, which had a positive impact,
    explaining why an expansion is needed in the upcoming cold season, with higher household
    expenses and consumption during the winter holidays.


    According to Prime
    Minister Ciolacu, the cap on food prices contributed to bringing inflation
    under 9% last month. The new ordinance should be endorsed by the end of this
    month when the former provisions are going to expire.


    Seven food categories
    should be added on the list of those with a provisionally capped trade markup.


    With the expanded period
    of three months by the end of January 2024, of the 14 capped prices, other food
    products will be added such as pound cake, tomato sauce, some types of light
    sour cream, margarine and yeast. According to the authorities, the decision to
    add more subsidized products to the list has been made jointly with processors
    and retailers. Failure to comply with the provisions of the aforementioned
    ordinance is considered offence and punishable with fines between 100 thousand
    to 2 million RON.


    (bill)

  • Record-high inflation in Romania 12/05/2022

    Record-high inflation in Romania 12/05/2022


    After countries all over the world reported record-high inflation rates last week, Romania too is confronted with the highest annual inflation rate in the last 18 years – nearly 14%, way above the Central Banks estimates. Natural gas reported the highest increase in April, by over 85%, potatoes and cooking oil by nearly 40%, and fuel by over 35%. 20% price hikes were also reported for heat, electricity, air transport, postal services, water, sewerage and sanitation utilities. Prices for fresh and canned vegetables also went up, as well as for grains and flour products, including bread, thus reducing Romanians purchase power considerably. According to the National Statistics Institute, most general consumption products did not report any decrease. Only the prices for rail transport and telephone services leveled out.




    The Central Bank estimates the inflation will continue to exceed the original forecast and is expected stay above 10% in the first half of next year as well and go below this mark only in the second half of 2023. To help the economy, the Bank has increased the monetary policy interest rate, which is a reference for setting loan rates. According to the National Bank, the energy price hikes cannot be kept in check by the reference rate, although it can influence the general evolution of prices. Against the backdrop of price hikes across the board, the business sector believes inflation is the main threat right now. The factors that impact the current evolution are expected to continue, experts say, estimating the inflation will continue to rise until summer. Specialists also argue the more tangible effects of price hikes on Romanian consumers will appear in the second half of the year, because consumption prices will continue to go up, also under the influence of the negative fallout of the war in Ukraine and the related sanctions.



    In this context, the government is looking for solutions to ease the pressure on the population, and has already adopted two measures as part of a support package. The first is a 50-Euro social voucher that will be provided every two months to individuals with low income, while the second measure will adjust material prices for ongoing construction projects using European funds. Besides, the government is also discussing an emergency decree that will allow the Competition Council and the Consumer Protection Agency to intervene more quickly when operators increase prices without due justification, which the authorities have noticed on numerous occasions of late. (VP)




  • Economic forecasts for Romania

    Economic forecasts for Romania

    The
    European Commission has slightly lowered its economic growth forecast for Romania.
    Therefore, our country’s economic growth is expected to stand at 7%, compared
    to the original estimate of 7.4% presented in July. The Commission expects
    Romania’s GDP to exceed the level reported before the pandemic and to continue
    to expand in the future to approximately 5%, fueled by domestic consumption and
    investments under the Recovery and Resilience Plan. Economic growth is
    endangered by the low rate of vaccination, travel restrictions that might
    affect consumption and possible delays in implementing the National Recovery
    and Resilience Plan. EU Economy Commissioner, Paolo Gentiloni, warned that
    growth prospects at EU level are put at risk by the increasing number of
    infections in countries with low vaccination rates.



    The EU official also
    referred to a growing pressure on production in Member States due to deadlocks
    reported in global distribution chains. Romania fares slightly better compared
    to other EU states in terms of economic growth. Conversely, its inflation rate
    is above the EU average, whereas unemployment will go down less compared to
    other states. The Central Bank recently announced the inflation rate last month
    reached nearly 8%, the highest level reported in the last 13 years. The price
    hikes for energy and fuel, by nearly 25% higher compared to October 2020, have
    increased prices across the board, and the trend will continue into the second
    half of next year, the Central Bank and economic experts have warned. Next
    month, the inflation rate is expected to stand at 7.5% and will reportedly go
    down to 5.9% at the end of next year. The Central Bank says these estimates exceed
    the forecast present in August due to the latest energy price hikes. Central
    Bank spokesman, Dan Suciu, referred to the future evolution of prices:




    Price
    hikes are largely behind us now. That doesn’t mean we will see prices going
    down soon. Where prices will go up, the increase will be marginal. The
    inflation rate will continue to grow constantly until the end of 2021, and will
    start dropping slightly until April, due to compensations, energy subsidies expected
    to take effect starting November 1, and whose effects will start to show in
    April. But again, the difference will be marginal.


    Last
    month, natural gas reported the highest increase compared to the previous month,
    over 21%. The only category that reported a significant drop in prices was air
    travel, over 16%. (VP)



  • Economic forecasts for Romania

    Economic forecasts for Romania

    The
    European Commission has slightly lowered its economic growth forecast for Romania.
    Therefore, our country’s economic growth is expected to stand at 7%, compared
    to the original estimate of 7.4% presented in July. The Commission expects
    Romania’s GDP to exceed the level reported before the pandemic and to continue
    to expand in the future to approximately 5%, fueled by domestic consumption and
    investments under the Recovery and Resilience Plan. Economic growth is
    endangered by the low rate of vaccination, travel restrictions that might
    affect consumption and possible delays in implementing the National Recovery
    and Resilience Plan. EU Economy Commissioner, Paolo Gentiloni, warned that
    growth prospects at EU level are put at risk by the increasing number of
    infections in countries with low vaccination rates.



    The EU official also
    referred to a growing pressure on production in Member States due to deadlocks
    reported in global distribution chains. Romania fares slightly better compared
    to other EU states in terms of economic growth. Conversely, its inflation rate
    is above the EU average, whereas unemployment will go down less compared to
    other states. The Central Bank recently announced the inflation rate last month
    reached nearly 8%, the highest level reported in the last 13 years. The price
    hikes for energy and fuel, by nearly 25% higher compared to October 2020, have
    increased prices across the board, and the trend will continue into the second
    half of next year, the Central Bank and economic experts have warned. Next
    month, the inflation rate is expected to stand at 7.5% and will reportedly go
    down to 5.9% at the end of next year. The Central Bank says these estimates exceed
    the forecast present in August due to the latest energy price hikes. Central
    Bank spokesman, Dan Suciu, referred to the future evolution of prices:




    Price
    hikes are largely behind us now. That doesn’t mean we will see prices going
    down soon. Where prices will go up, the increase will be marginal. The
    inflation rate will continue to grow constantly until the end of 2021, and will
    start dropping slightly until April, due to compensations, energy subsidies expected
    to take effect starting November 1, and whose effects will start to show in
    April. But again, the difference will be marginal.


    Last
    month, natural gas reported the highest increase compared to the previous month,
    over 21%. The only category that reported a significant drop in prices was air
    travel, over 16%. (VP)



  • Rising food prices in Romania

    Rising food prices in Romania

    Food products becoming ridiculously expensive around big holidays such as Easter, Christmas and the New Year seems to have become a tradition in Romania in the past few years. Retailers are the first to blame for taking advantage of the customers increased shopping mood around these holidays.



    This year, however, some basic food products have become outrageously expensive. For several weeks now, eggs, meat and dairy products, butter in particular, have almost doubled their shelf price. The rise in the price of eggs is justified by a decrease in production given the nearing of winter, but also by the crisis on the European market triggered by the Fipronil contamination scandal, that affected farms in the Netherlands, France and Belgium.



    A European crisis is also invoked when it comes to butter having become more expensive. Romanians must also pay more for meat, although the Romanian Association of Animal Breeders and Exporters says that the farm gate price for chicken and pork has in fact went down by 30% as against last year.



    The Agriculture Minister himself, Petre Daea, says the price hike is unjustified: “We have verified both the shelf price and the farm gate price for every separate product. What we have found is that there are no changes in terms of production costs. We have not found any objective reason that should justify the price increase, so we have called on the Competition Council, the relevant body in this case, to look into the matter and see if they can find any reasons for it on the market.



    Among the factors that can influence the costs set by producers and transporters are an increase in the energy and fuel prices or a depreciation of the domestic currency, the leu, against the euro.



    Even so, these factors alone could not have caused the current doubling of prices, says the president of the trade unions in the food sector, Dragos Frumosu: “Its difficult to fine anyone, because the market is free after all. The problem is the lack of any consideration of those who do this deliberately, for the consumers that bring money to their pockets on a daily basis, since we are talking about food.



    While Dragos Frumosu blames the current situation on a “game at international level, from which producers have to win, the head of the employers associations in the food sector, Sorin Minea, does not believe in the conspiracy theory. In his opinion, the current rise in prices is just the beginning of a process whose major effects will be seen all throughout the next year.



    Sorin Minea: “The price increases will contain all additional costs, with the electricity, fuel, inflation, domestic currency depreciation, the gross salary rise. All these will contribute to setting the new prices of food products.



    According to the National Statistics Institute, in the first ten months of the year the price of electricity went up by over 7%, the thermal energy price increased by around 3% and the price of natural gas by almost 2%.