Salary cuts and price increases leave Romanians with dwindling savings

The price increases after this summer's VAT hike have left people with less and less money for savings, and, considering that banks are no longer willing to pay very high interest rates on deposits, the population's savings have slowed down significantly.

At the end of August the population had nearly 62 billion RON (equivalent to 14.5 billion euros). Excluding the impact of inflation, the amount is 3.9% lower than a year before, according to data from the NBR (National Bank of Romania). This is the third month in a row where the annual variation is negative, and, moreover, the decline is deepening.
"The population's savings started on a downward trend over the last few months, amid a decline in the cash available as a result of the income decline, and the depreciation of the RON against hard currencies, which increased the population's indebtedness level. I expect the downward trend of deposits set up by the population to continue because of the lower living standards," says Melania Hăncilă, chief economist of Volksbank.