Romania Interest Rate

The National Bank of Romania kept its benchmark interest rate unchanged at 6.5% during its October 2024 meeting, following two consecutive rate cuts. Annual inflation rose to 5.4% in July from 4.9% in June before easing to 5.1% in August. This increase was driven by a rapid rise in food and energy prices due to severe drought conditions and higher natural gas distribution tariffs, overshadowing decreases in administered prices and fuel prices influenced by falling crude oil prices. As for economic activity, it showed a slower quarter-on-quarter growth of just 0.1% in Q2, down from 0.5% in Q1, indicating a reduction in excess aggregate demand. However, year-on-year GDP growth improved to 0.8% in Q2, largely fueled by a notable increase in household consumption.