Romania's annual inflation rate is expected to rise between March and June 2026 to levels higher than previously forecast, mainly due to anticipated effects from rising fuel prices amid a sharp increase in oil and natural gas quotations in the context of the Middle East war, according to a press release by the National Bank of Romania (BNR).
"Based on current assessments, the annual inflation rate will increase between March and June 2026 to levels higher than previously projected, primarily due to expected effects stemming from higher fuel prices, amid the significant rise in oil and natural gas prices in the context of the Middle East war. These will overlap with unfavourable base effects expected in the second quarter of 2026 in the energy segment, as well as with the temporary direct effects generated from the second half of 2025 by the expiry of the electricity price cap scheme and by increases in VAT rates and excise duties. These effects are expected to fade in the third quarter of 2026, leading to a sharp downward correction in the annual inflation rate," the BNR said.
At the same time, the central bank noted that progress in fiscal consolidation initiated in 2025 is likely to intensify disinflationary pressures from fundamental factors, particularly from aggregate demand, with favourable implications for inflation expectations and further adjustment of the current account deficit.
However, uncertainties remain regarding future measures likely to be adopted to continue fiscal consolidation beyond this year, in line with the medium-term budgetary-structural plan agreed with the European Commission and the excessive deficit procedure.
At the same time, significant uncertainties and risks to the outlook for economic activity and implicitly for medium-term inflation stem from the Middle East war and the current global energy crisis. These may affect consumer purchasing power, as well as firms' activity and profitability, including through their impact on economic and inflation dynamics at the European and global levels and on regional risk perception, with consequences for financing costs.
In this context, the absorption and full use of European funds, particularly those under the National Recovery and Resilience Plan (PNRR), are essential to partially offset the contractionary effects of fiscal consolidation and the Middle East conflict, as well as to support the implementation of necessary structural reforms, including the energy transition.
According to the BNR, relevant factors also include the monetary policy decisions of the European Central Bank and the Federal Reserve, as well as the stance of central banks in the region.
The National Bank of Romania has revised upwards its inflation forecast for end-2026 to 3.9%, from 3.7% previously, and expects it to reach 2.7% by the end of 2027, according to data presented in February by BNR Governor Mugur Isarescu.
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