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12-month period to October – up from 8.6% in October 2020 and 8.0%
in October 2019.

The current account deficit had continued to expand at a very fast pace,
adding more than 85% in 2021 H1 overall, versus the same year-earlier
period, the minutes from the National Bank of Romania (BNR) October
monetary policy board meeting read. The developments were viewed
as particularly worrisome by board members amid a significant drop in
the coverage of the current account deficit by autonomous capital flows
in Q2, yet from a considerably higher level in the first month of the year.

2.9.3 Inflation and monetary policy

Romania’s headline inflation is expected to have hit 7.5% y/y at the end
of 2021 to rise to 8.6% y/y at the end of the second quarter of 2022 as
the temporary energy bill subsidies are phased out, and ease to 5.9%
y/y at the end of 2022, under the revised inflation outlook revealed by
the BNR on November 11.

Romania’s consumer prices continued to increase in December when
the inflation reached new records, after prices remained constant in
November, partly thanks to a subsidy scheme enforced by the
government to moderate the energy prices.

Consumer prices advanced by 0.7% in December, driven by the
electricity price that increased by 3.9% and contributed nearly 0.3
percentage points (pp) alone to the monthly inflation, according to data
released by the statistics office, INS.

The annual inflation reached 8.2% y/y and energy prices in general
(electricity, natural gas, heating and fuels included) contributed more
than half, more precisely 4.3 pp.

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