"It is highly likely that, in the absence of additional government support measures for businesses and households, the inflation rate will exceed the EU threshold of 3% in 2022,” the National Institute of Statistics (INS) warned in a May 19 business note. The agency reported that in the first quarter of 2022, household final consumer prices rose by 4.4% YoY. Averagely, over the last twelve months, prices continued to rise in March 2022, increasing by 2.9%; whereas the increase was only 2.3% in March 2021, 2.5% in January 2022, and 2.7% in February 2022.
In the face of that situation, the INS recommends that the government "while continuing to prioritize the health crisis (...) adopts more measures based on the dynamics of the global market to proceed with precise regulation. This will help ensure the supply of markets and curb any unreasonable rise in prices. INS also suggests that the government deploy additional support measures (both comprehensive and targeted) for businesses and households.
Inflation is driven by rising food prices, mainly due to the 6.8% increase in the price of bread and cereals, 6.4% in the price of meat, and 10.2% in the price of oil and fats, according to official data. The stats agency said this situation, which started with the health crisis, was aggravated by the conflict between Russia and Ukraine. The conflict has further contributed to the increase in the international market prices of imported products, costs of raw materials, agricultural inputs, energy, construction materials, and maritime freight.
Other measures to address the issue, INS says, include the development of infrastructure (roads, energy, water) to improve and facilitate the transport of agricultural products from production basins to markets.