Inflation has seriously impacted Romanians' saving and spending habits. Nearly half (48%) of respondents to a study conducted by Ipsos for ING Bank can no longer afford to save because of inflation, and only 11% put more money aside to face a more expensive future, already signaled by the numerous price increases.

One in five Romanians is attentive to the purchases made, following the discounts and keeping records of income and expenses regularly in order to enjoy financial stability.

Due to the increase in prices, 29% of Romanians save less in their accounts or no longer save at all, and a quarter of them say that they have changed how they collect or invest their money.

On the other hand, investing in financial products and material goods is not a priority for many Romanians: 58% of those surveyed say that they invest very rarely or not at all in shares/bonds/mutual funds, but also in real estate or valuables, the same source revealed.

"The impact of rising inflation on consumption behavior is complex and usually manifests with a certain inertia. Thus, it usually takes several good quarters before consumers really notice the change in their disposable income and begin to adjust their consumption. […] Even quasi-permanent changes in consumption and saving behavior may occur if this situation lasts longer. Thus, when inflation and interest rates begin to fall, consumers may long extend their prudent behavior from the periods of high inflation, and it will take a relatively long time of consistent real wage increases to return to pre-inflationary consumption behavior," said Valentin Tătaru, chief economist at ING Bank Romania.

The same study found that Romanians spend less on clothes, restaurants and travel to balance the price hikes. To cope with inflation, 50% say they have reduced their spending on clothing and restaurants/bars, while 48% allocate a smaller travel budget.

Over 70% of Romanians spend more of their income on food/daily shopping and energy than five years ago, and over 65% expect to continue to do so five years from now.

The consumer price inflation in Romania eased to 9.44% y/y in July from 10.25% y/y in June, according to data from the statistics office INS.

irina.marica@romania-insider.com

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