Concordia: Inflation has passed its peak and could fall to 6% by the end of the year

Concordia claims that the 10.4% level in June, announced on Monday by the National Institute of Statistics, represents a decrease compared to the maximum of 10.9% in May. In the opinion of the organization’s economists, the effects of VAT increases, energy price increases and fuel price increases will diminish in the coming months, allowing for an accelerated reduction in inflation.

Concordia estimates that inflation around 6% would bring more predictability to the economy and could create conditions for interest rate cuts. According to the employers’ associations, financing costs for the population and companies would decrease, which could support lending and investment.

„Such a level would bring more confidence and predictability and open the discussion about possible reductions in the monetary policy interest rate by the NBR. In turn, inflation anchored at significantly lower levels would facilitate the decrease in financing costs for the population and companies, giving a boost to lending and investment, especially for SMEs that do not have easy access to cheaper external financing,” claim representatives of the Concordia Employers’ Confederation.

The employers’ associations point out that the effects of inflation are still being felt. According to Concordia’s calculations, since January 2025, wages have increased more slowly than prices, and an employee with an average salary has lost approximately 10% of purchasing power. Population consumption has decreased, and companies that depend on domestic demand are already feeling this pressure.

„Price and tax increases over the past year have strongly affected demand in important sectors of the Romanian economy, represented by Concordia, such as furniture production, trade, HoReCa or real estate. Slowing down the inflation rate and restoring confidence are essential for the recovery of consumption-dependent sectors and for saving Romania’s economic growth and, implicitly, jobs,” said Iulian Lolea, chief economist of the Concordia Employers’ Confederation.

The decrease in inflation, alone, is not enough to revive the economy, warns Concordia.

„The economy is far from being healthy. It is necessary to continue reforms, continue investments in infrastructure and ensure fiscal-budgetary predictability. The future reduction of the budget deficit must be done at the expense of improving collection and reducing inequities,” say the representatives of the employers’ associations.