In 2024, Romania experienced a significant deterioration in price stability, a critical factor in the convergence assessment for euro adoption. According to the European Commission’s report, Romania’s harmonized inflation (HICP – Harmonized Index of Consumer Prices) increased from 6.4% during May 2021 – April 2022 to 7.6% between June 2023 and May 2024. This increase is particularly concerning, as the European benchmark for price stability, based on the Maastricht criteria, decreased to 3.3%. As a result, Romania now has a gap of 4.3 percentage points (pp) from the criterion, up from a 1.5 pp gap in the previous report.
Maastricht Criterion Context and Reference Countries
According to the Maastricht Treaty’s price stability criterion, a state’s inflation rate must not exceed by more than 1.5 pp the average of the three best-performing EU economies in terms of price stability. In 2024, the countries used to establish this inflation benchmark were Denmark (with an inflation rate of 1.1%), Belgium (1.9%), and the Netherlands (2.5%), leading to an average rate of 1.8%. By adding 1.5 pp to this average, the inflation threshold for convergence was set at 3.3%.
Regional Trends and Comparisons
Compared to Romania, other non-euro EU states have either improved their inflation rates or managed to slow down its increase. For instance:
- Poland reduced its inflation rate from 7% to 6.1%, while Bulgaria brought it down from 5.9% to 5.1%. Although both remain above the threshold, their differences are smaller compared to Romania.
- Sweden maintained its inflation rate close to the Maastricht criterion, slightly decreasing from 3.7% to 3.6%, thereby aligning with price stability requirements.
- The Czech Republic showed minor fluctuations (from 6.2% to 6.3%) and occasionally meets the stability criterion, often staying close to the required threshold.
Romania’s Position Relative to Hungary
In the regional context, only Hungary shows a more challenging situation than Romania, with a gap of +1.6 pp from the established benchmark compared to +1.2 pp for Romania. However, Hungary managed to reduce inflation more rapidly in recent months, recording an HICP of 3% in September 2024 compared to Romania’s 4.8%. Consequently, despite initially facing greater difficulties, Hungary has now come closer to the benchmark, putting Romania in a relatively disadvantaged position.
Implications for Euro Adoption
For Romania, these data indicate a significant risk of delays in the euro adoption process, as it does not meet the convergence criteria for price stability, and its position is worsening. The 4.3 pp gap from the reference indicates a substantial deviation, meaning that reducing it will require considerable economic and fiscal measures to align with eurozone requirements.