Prices of staple foods started to fall in 2024, especially for products that were most affected by price increases in 2022 and 2023, representatives of major retailers say. The PSD proposal, which stipulates capping the commercial surcharge at 20%, had an impact.
Data provided by the National Institute of Statistics confirms this trend, showing that in March 2024, the prices of flour, sorghum, oil, milk and eggs fell by up to 30% compared to the same period of the previous year. These figures reflect significant deflation in ten food categories.
The biggest price drops were for flour, by more than 30% in March, compared to the same month last year. At the same time, Romanians pay 27% less for sorghum and 25% less for oil. Butter (-12%), sugar (-11%) and margarine (-8%) are also foods that have become cheaper. All these basic foods are on the list proposed by the PSD and benefit from capping the commercial addition at a maximum of 20%.
Representatives of major retailers note that this deflationary trend is the result of post-pandemic adjustments and stabilization of supply chains. However, it is important to strike a balance between stimulating consumption and maintaining economic stability.
“From February 2024, deflation became visible, especially in the category of basic foods, but it remained in a single-digit range (below 10% – n. ed.). We will continue to monitor the evolution in order to understand the extent and long-term impact”, say the representatives of the company Penny Romania, according to zf.ro.
The representatives of the big retailers say that they noticed price drops especially for basic food products such as dairy products, eggs, vegetables and fruits, products that became more expensive last year due to inflation. In addition, they expect this trend to continue in the coming months, especially since they expect a constant decrease in inflation as well.
“The annual inflation rate will continue to decrease in the coming months at a slower pace compared to 2023 and on a slightly higher trajectory than that anticipated in the February 2024 medium-term forecast, which was down to 4.7% in December 2024 and to 3.5% at the end of next year”, the BNR transmitted in April, after the monetary policy meeting.
The price limitation measures taken by the current Government led by Marcel Ciolacu show that Romania is on a positive trend. After two years of constant price increases due to multiple crises and a constant increase in inflation, now the purchasing power of Romanians is increasing.
The ceiling on basic foods until the end of the year
A measure recently proposed and adopted by the Social Democratic Party aimed at capping the trade mark-up at a maximum of 20%, with the aim of reducing the financial burden on consumers and encouraging competition between traders. PSD decided to maintain the measure until the end of 2024 when the inflation rate is expected to reach below 5%.
Thus, essential products such as bread, milk, eggs, oil and sugar became more affordable for consumers, reflecting a positive change in terms of living costs. This has brought a direct benefit to the low- and middle-income population, who directly feel any price increase.
Also, capping the commercial addition had a positive impact on competitiveness in the food sector. Merchants have had to review their pricing strategies and optimize costs to stay compliant with the new regulations imposed by the law. This increased competition has led to a diversification of supply and an improvement in product quality, as retailers have focused on increasing efficiency and meeting consumer demands at a more affordable price.
In addition to the immediate benefits to consumers and competition, capping trade markup also had positive consequences for the economy as a whole. By reducing the prices of basic foods, the purchasing power of the population was stimulated, leading to an increase in domestic consumption and supporting local economic activity.
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Tags: prices basic foods PSD maintains capping commercial addition
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