Oil price pass-through into inflation in Romania

Oil price shocks driven by geopolitical tensions brought back memories of supply-side inflationary spikes. In our latest special report, we decided to have a closer look at oil price pass-through into domestic consumer prices. We concluded that the main inflationary impact on the first year corresponds to the direct first-round effect, whereas indirect first-round effects are quite modest, but their relevance increases a year after. The second-round effect from wage indexation, on the other hand, seems to be quite modest in the first two years.