The industrial prices for intermediary industrial goods, which do not include the energy prices, rose by 50% over the past couple of years as of October (when they were up 20.5% YoY) - twice as fast as the consumer goods, which have advanced by only 23% (as of September, latest data available) over the same period of time.

The 250% surge in the price of energy accumulated over the past two years has not yet passed through to the factory-gate prices of the end-user goods, which increased by between 19% (for capital goods) to 27%-28% for the consumer goods (durable or non-durable).

While the sharp rise in energy prices is not likely to fully reflect in end-user prices, the price of intermediary goods is a good proxi for where the consumer prices should be within several quarters.

The distribution and retail chain seems to have absorbed a certain (small) part of the rise in consumer goods in order to avoid a significant drop in sales.

But the VAT collection data for October (only 3% up YoY) indicate subdued consumption, Ziarul Financiar warned, quoting economic analyst Aurel Dochia. Unless the energy prices diminish in the coming period, the potential for a further rise in consumer prices is significant, and consumer price inflation may easily remain in the double-digit area over the next 12 months.

iulian@romania-insider.com

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