The three-stage plan promised upon governance take-over has come true, and the purchasing power is currently significantly higher than the cumulative inflation, Investment and European Projects Minister Adrian Caciu said in a post published on his Facebook page on Tuesday.

He made reference to the 2020-2024 electoral cycle, mentioning that "this plan was applied without generating an inflationary spiral but, on the contrary, by establishing a downward trend of the inflationary impetus."

"The 2020-2024 electoral cycle: purchasing power versus inflation. From the perspective required by the context analysis, I would label this electoral cycle as one of contrasts, a period in which we went from low inflation to a historic one for many economies, then a regression of the inflationary impetus, a type of sinusoid that directly affected purchasing power and required various, specific but also innovative fiscal-budgetary or/and monetary interventions. A period in which we have faced the most crises in relation to the period, from the pandemic crisis to the energy crisis, the supply chain crisis or the one caused by the war in Ukraine. A period in which inflation and purchasing power indicators have been fluctuating, largely influenced by external factors and mitigated by internal measures, a phase that I believe we have passed successfully," mentioned Adrian Caciu.

According to him, the inflationary pressures have worsened as the crises have emerged, by "changing the direction of the use of excess money."

In his opinion, the liquidity tightening measures came late from the central banks and it is a lesson for the future for monetary policy specialists, because the superposition of the two types of pressures only led to the building of a much higher inflation wave, with an effect on future aggregate demand and, respectively, on the reduction of the aggregate economic growth potential.

On the other hand, the lack of European monetary solidarity and centralised, unitary intervention led to additional costs borne by member states' budgets, namely high deficits which, in turn, were met by inflationary pressures.

According to him, Romania had an inflation rate of 2.6% in 2020, in 2021 it doubled to 5.1%, in 2022 it reached 13.8%, and from 2023 the downward trend started, initially to 10.4% at the end of 2023, currently it is 5.4%, and by the end of 2024 it will be around 4%.

"That is why, knowing and anticipating the effects of this wave of inflation on purchasing power, our strategy, those of the Social Democratic Party in the governmental area, was to act gradually, in three stages, in the period 2022-2024, stages that we have announced on several occasions, namely: 2022 - the year of compensating for the loss of purchasing power; 2023 - the year of stabilising purchasing power; 2024, the year of boosting purchasing power," the dignitary wrote.

He mentioned that the actions were different because "inflation is also felt and affects purchasing power differently."

"And if we look at the statistical data, with a cumulative inflation of around 35%, we see the following: a. the average net salary increased 43%, from 3,620 lei to 5,176 lei, an increase of 10 percentage points over inflation; b. the minimum gross salary increased 66%, from 2,230 lei to 3,700 lei, an increase of 31 percentage points over inflation; c. the minimum pension increased 60%, from 800 lei to 1,281 lei, an increase of 25 percentage points above inflation; d. the average pension increased 55%, from 1,450 lei to 2,252 lei and will increase to 2,761 lei from September 2024, which means an average increase of 90% compared to the 2020 level, namely 55 percentage points above inflation," the minister added.

In his opinion, at the end of this year we can draw the clear conclusion that "real purchasing power has increased these years, although there will be many voices that will say that it could have been even more or even better." AGERPRES (RO - author: Nicoleta Banciulea, editor: Mariana Nica; EN - editor: Adina Panaitescu)