Romania Interest Rate

The National Bank of Romania kept its benchmark interest rate unchanged at 6.50% for the eighth consecutive meeting on August 8. Headline inflation accelerated to 5.66% in June from 5.45% in May, the highest since April 2024 and well above the 2.5% ±1 percentage point target range. Policymakers warned inflation will jump in Q3 after the expiry of electricity price caps and the Aug. 1 VAT and excise hikes, before easing gradually but staying above previous forecasts. GDP annual growth slowed to 0.3% in Q1 2025 from 0.5% in Q4 2024, as weaker household spending offset a rebound in investment. The unemployment rate fell in Q2 after rising to 6.0% in Q1, though total employment declined in April and May. July surveys pointed to a sharp drop in hiring intentions across sectors and a further easing in labor shortages. The central bank maintained a cautious stance, citing persistent inflationary pressures and heightened uncertainty from fiscal measures, trade tensions, and geopolitical risks.