The phenomenon of shrinkflation (hidden inflation) has manifested itself, and I believe that it also manifests itself here, the official representative of the National Institute of Statistics confirmed on Wednesday at a press conference. “I felt it on my skin – the 32 cm pizza “entered the water” and was 28 centimeters, but the price remained the same as the 32.”

This phenomenon manifests itself in different places and with different products, but most often we see it with food products, he added. The representative of the INS, which coordinates everything that means rugs in Romania, explained the difficulty of covering inflation in conditions where traders try to preserve profits and resort to various tricks.

The phenomenon of shrinkflation (hidden inflation) is observed not only in Romania, but also everywhere. An investigation by the German newspaper Handelsblatt showed how German confectioners abandoned the use of butter in cakes, preferring much cheaper margarine (butter in Germany has risen in price by almost 50%). French confectioners have also reduced the amount of jam in their croissants and use less honey to cover them, writes Les Echos.

“Our colleagues are trained to pay attention to the features of the product. We follow, for example, the price of a bottle of tomato juice with a volume of 0.7 liters with a concentration of tomatoes of 62%. If we see that the same bottle produced by the same company is now 500 ml and the price has remained the same, we apply mathematical methods to find out the price for the quantity we need. “We have rules and procedures that must be applied. Certain statistical transformations are applied to make the price comparable. “These principles of continuity and comparability are extremely important because otherwise you run the risk of artificially distorting price movements,” INS officials say.

112 INS employees whose work makes Mugur Iserescu horrified

There are 112 of our colleagues whose main task is to collect prices, says the statistician. “They know in the most real way how to collect the price; they know how to differentiate products, always identify the same product. Prices are not collected by chance. Prices are collected for always the same goods and always from the same store,” he explained.

In total, INS “visits” 7,000 stores from which it collects prices. In addition, it also enters agri-food markets. “It’s important to collect from there because the market is still an important source of supply for people. There, colleagues who collect prices are taught to distinguish goods from manufacturers and traders, between Romanian and imported goods. In total, we collect about 150,000 prices every month,” says the head of the INS Price Department.

A colleague from pricing goes to the field every day. He then has two days to review and verify all of this work. Food products are collected 3 times a month, and non-food products are collected in the second decade of the world. We look at prices in supermarkets and hypermarkets, as well as in neighborhood stores, but it should be a representative store, not one that no one goes to, says the INS representative.

In addition to inflation created “on the spot”, Romania imports inflation from outside, especially from countries with which we have a large trade deficit and where prices are higher than in Romania. “Look at the deficit we have with Germany or Hungary! You will see how much inflation we import from there,” INS Tudorel President Andriy pointed out.

In Germany, food products have grown by more than 17% (data for February 2023), and we import 5 billion euros of German goods annually. Likewise, inflation in Hungary has exceeded 25%, and imports are approaching 2 billion euros per year.

Romania also exports inflation to countries such as the United Kingdom (with which we have a positive trade balance, and “Romanian” inflation is higher than the British one), the Republic of Moldova, the USA or France. However, the list is longer and includes Morocco, Japan, Norway, Gibraltar and other countries with which we have a positive trade balance and where inflation is lower than ours.

The population perceives prices differently and in their own way

To understand how they react to rising prices, leave Bucharest and go to a supermarket parking lot in a small provincial town.

A few hours of talking to people about food stamps shows you the trade-offs and how complicated people are when they buy food.

The consumer price index, which measures the money taken out of your wallet or card to buy food, goods and services, rose 14.5%. Only food products rose in price by 21.6% in March 2023 compared to March 2022.

In January 2023, monthly food inflation (compared to inflation in the same month of the previous year) was the highest in 15 years. Which is terrible, despite the explanations from government institutions. Many of us say they are barely able to cope with these rising prices, and those on low incomes have been hit the hardest.

People talk about how they prefer to buy products on sale and how they go to 4-5 stores to find the best price.

Elena B. is from Puchoasa and left the Penny store (located right in the center, near the market) with a bag containing less than 5 purchased items. Elena is a pensioner, has about 3,000 lei in pension, of which almost 1,000 goes to medicine and doctors. He bought 300 lei because his former college colleagues are coming to visit him from Bucharest at the end of the week. Now she also takes care of her granddaughter, who begs her for cookies from the store, although she also has cake and tiramisu, her favorite cake, at home.

This summer, Elena also needs to repair the roof of the house and the gate at the entrance from the street, and she has no idea where to get more money.

For 68-year-old Konstantin P. from Pitesti, grocery shopping has become a second job. A passionate cook, he “hunts” for all the offers in the store based on what he likes to cook. “I can’t always buy what I want because I have to stick to a certain amount available,” says the former builder. Last year, he could not afford a single trip, although his brother, a retired Canadian, travels 2-3 times a year to all kinds of countries.

“As a child,” he recalls, “I couldn’t wait to go shopping with my parents. Now I’m terrified.”