Industrial price inflation hits 32% y/y in Romania after energy prices double

Industrial price inflation hits 32% y/y in Romania after energy prices double
By bne IntelliNews January 5, 2022

The industrial price index, also known as factory-gate prices, rose by nearly one third over the year (+32.1% y/y) to November 2021, according to the Romanian statistics office.

The advance was not even: energy prices nearly doubled (+94.5% y/y) and this inflationary shock is propagating through industries, eventually making an impact on consumer prices (+7.8% y/y as of November).

It can be expected that once the energy prices “normalise” the factory-gate prices will stop rising and the inflationary pressures seen at the level of consumer goods will disappear as well.

As of November, the prices of manufactured goods rose by 19.1% y/y, which is quite impressive for normal circumstances.

The prices of durable consumer goods rose by 12% y/y and the prices of fast-moving consumer goods by 6.6% y/y.

To what extent will the energy price shock propagate across industrial sectors, depends on the profile of the shock: initially seen as transitory, energy prices are now expected to remain high post-crisis. But it remains unclear how high will they stay and when will they return to the post-crisis equilibrium.

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