Romania, the absolute champion of the EU in terms of inflation. Economist: “Prices are returning to the menu of the 90s, with french fries, margarine and potatoes”

Romania is the country with the highest inflation in the entire European Union, which means that prices are increasing in our country at a sustained rate. This means the impoverishment of the population, explains the economist Adrian Negrescu, who claims that the fault belongs to the state, the only winner from inflation.

Romania is the European champion of inflation, a new economic counter-performance and a slap to the population that is getting poorer from one day to the next.

Since 2022, Romania has consistently had the highest inflation among all European Union states, with few exceptions, but in February 2024, the last month for which there are official Eurostat statistics, inflation is 7.1%.

With this percentage, Romania is the absolute champion of inflation. At a great distance, Croatia comes in 2nd place with an inflation of 4.8%, and in 3rd place is Estonia, with 4.4%. For comparison, the euro zone, even if it is facing major economic problems, has an inflation rate of only 2.8%.

“Adevărul” spoke with the renowned economist Adrian Negrescu to find out what generates this inflation for which the Romanian state cannot find any cure and to see what will happen next with prices.

“The hidden tax that the state cynically charges us”

From the start, Adrian Negrescu says that the culprit is the Romanian state, the only one that gains from the current situation. This is how Romania, unlike other countries, does not succeed in taming inflation.

“It is related to the state’s interest, first of all, to raise prices and collect more money for the budget from fees and taxes. It is the hidden tax that the state has been charging us for two years, cynically, without any remorse, cutting us off from our economic potential, severely affecting our purchasing power. The state does this only from the perspective of the desire to save itself, practically, to save the budget, to save the major expenses that it makes without any kind of meaning, in all kinds of fields that are not related to economic development“, explains the economist.

Back to cheap food

But inflation affects the population enormously, and the standard of living degrades from day to day. Adrian Negrescu says that because of the prices, more and more Romanians are returning to the menu of the 90s, with parisier, margarine and potatoes, because they simply cannot afford anything else.

“We’re already back to the 90s, because if you look at the x-ray of sales in stores, you’ll see that margarine, potatoes and french fries have come to the forefront of sales. Romanians returned to the cheapest products in stores and, therefore, there were some major distortions in the offer and pricing area. Many of the hypermarkets are forced to import basic food products from other countries, given that Romanians don’t really buy anything other than basic food products, given the money they have at their disposal”, says Negrescu.

And that’s not all. With the increase in prices, Romanians returned to tap water, which is often not exactly indicated and is not always safe.

“I was talking to the manager of a multinational and he was telling me that, unfortunately, Romanians have returned to drinking tap water, because they can no longer afford to buy a two-liter bottle of juice, which ended up costing 10 lei“, adds Negrescu.

Services are increasingly expensive

The economist also talked about what could come next this year. “I believe that services will be at the forefront of price increases this year. This has been felt since the 4th quarter of last year, when we saw a significant increase in service prices. The services will be at least in the first part of the year and this will affect our purchasing power even more, because already in the food area a ceiling has been reached”concludes Adrian Negrescu.