Romania's inflation slows to 8.16% in July, above expectations

Romania's annual inflation rate eased to 8.16% in July from 9.06% in June, the National Institute of Statistics reported on Tuesday.

The figure exceeded market expectations, which had projected a further slowdown to 7.8%. Core inflation, which excludes volatile food and energy prices, fell to 10.3% from 10.8% in the prior month.

On a monthly basis, consumer prices increased 0.7% in July, up from a 0.2% rise in June. The data reflects persistent price pressures despite recent monetary tightening by the National Bank of Romania (NBR).

The central bank has raised its key interest rate by 100 basis points to 7.00% since February to curb inflation, which remains among the highest in the European Union. Policymakers have signaled further tightening if necessary to ensure inflation returns to the 2.5% ±1 percentage point target.

Economists note that while inflation is trending lower, services inflation remains elevated at 12.3%, driven by wage growth and strong domestic demand. Food prices rose 11.2% year-on-year, while energy costs increased 5.4%.

The latest data reinforces expectations that the NBR will maintain a hawkish stance at its next policy meeting in September, though some analysts anticipate a slower pace of rate hikes given the gradual disinflation trend.