Acting Prime Minister Ilie Bolojan expects inflation to ease in the coming months, dropping to around 8% in July and 6% in August, provided that "no other shocks" occur. His statements follow fresh data from the National Institute of Statistics (INS) showing annual inflation rising to 10.71% in April, from 9.87% in March.
"As last year's high-inflation months, July and August, drop out of the calculation, annual inflation will start to fall. And if no other shocks intervene, in July we will head toward 8%, and in August we will go down toward 6%," Bolojan said at a press conference at Victoria Palace.
He added that the inflation and technical-recession figures published by INS were not a surprise, pointing to several contributing factors. Massive budget deficits, he said, "created a base for inflation", compounded by the liberalization of electricity prices, the two-percentage-point VAT increase in 2025, the impact of the conflict in Iran on fuel prices, and higher fertilizer costs.
Bolojan described the second consecutive quarter of technical recession as a "predictable" effect of years of "overstimulated consumption on debt, without a corresponding increase in domestic production".
"Even if it seems like a bad sign, I believe it shows our economy is healing," he said, noting that despite "huge deficits" in recent years, economic growth remained weak. "We overstimulated consumption on debt, to mask an economic decline. Now we are in a moment of truth."
Bolojan argued that reducing the deficit and debt-fuelled consumption inevitably led to economic contraction, but insisted Romania is "on the right track", citing last year's deficit reduction. He rejected claims that the lower deficit was achieved through "accounting tricks" or unpaid bills.
"There are two types of deficit calculation: the cash deficit and the ESA deficit, which includes issued but unpaid invoices. Last year we had a cash deficit of 7.6% of GDP and an ESA deficit of 7.9% - a minimal difference. All invoices were paid by year-end," he said. It was, he added, "abnormal and immoral" on the part of those who "set the house on fire" through excessive spending to criticise now "those putting out the fire".
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