The outbreak of commodity courses, the difficulties of supply, labor shortages and wage increases bring prices in Romania, Poland, Czech Republic or Hungary.
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For days, the inhabitants of Timisoara, in western Romania, start their day with the same ritual: to try their radiator with anxiety. On October 26, more than 50,000 homes, as well as schools and hospitals in the city, were deprived of heating and hot water for several days. Reason: The outbreak of energy prices pushed the local heating company, Colterm, at the edge of the bankruptcy. Faced with the accumulation of unpaid bills, the gas producer has ceased to supply. Since then, the municipal authorities are struggling with other suppliers to deliver gas and coal to the Colterm power plants. But deliveries are random. So, while the country enters the winter, the Radiators of Timisoara do not heat every day, and often too little.
In October, the Romanian consumer price index increased by 7.9% over one year, at the highest for ten years, according to the National Statistical Institute. This is a lot of soaring gas tariffs (+ 46%), and the numbers are also vertiginous in neighboring countries. In October, inflation grew by 5.8% in the Czech Republic, 6.5% in Hungary – never-seen since 2012 – or 6.8% in Poland. According to British Oxford Economics forecasts, it should increase by 7% throughout Central and Eastern Europe this year, compared with 3.7% in the euro zone. “This region is where the risk of a sustained price increase in the coming years is the highest,” Liam Peach Analysis, British Capital Economics.
“For the moment, this inflationary shock is largely linked to the rise in commodity prices and supply problems, particularly in countries very integrated with European production chains,” observes Rafal Benecki, economist At ING, Warsaw. And, unsurprisingly, households are the first to suffer. In Romania and Hungary, heating and energy expenditures account for 25% and 22% of family spending, compared to 7% in Germany, according to the European Bank for Reconstruction and Development (EBRD). “The pressure for governments to take steps in favor of these households will increase,” says Beata Javorcik, EBRD Chief Economist.
“Shortages in the labor market”
Some have started doing it. Anxious to house the electorate as the legislative elections of 2022, the Cabinet of the Hungarian Nationalist Prime Minister, Viktor Orban, announced, Thursday, November 11, that the prices of gasoline and diesel at the pump would be capped at 480 FORESTS (1,31 euro) per liter for the next three months. Romania is considering similar measures.
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