Snap5 March 2018Updated 4 months ago

Romania: Retail sales slow down at the start of the year

Retail sales rose 11.4% year-on-year in January, down from 14.9% in December with slower growth rates across the board-- especially in food and fuel

shutterstock
260118-image-Romania-shopping.jpg

Retail sales fell by 0.9% in January compared to December in seasonal- and working-day adjusted terms but still rose 11.4% from a year ago. Digging further into details, we see that on an annual basis, non-food items grew by 17.2% (-1.8% from the previous month), down from 18.0% YoY in December, but quite impressive nonetheless. Fuel and food items followed the same pattern, expanding by 7.9%/8.5% YoY but falling in monthly terms by 1.2%/0.1%.

Retail sales gyrating south

NIS, ING
NIS, ING

Consumer sentiment weakening across the board

EC, ING
EC, ING

This is in line with soft consumer confidence data, which has been on an accelerated downtrend since reaching an all-time high in March 2017. Overall, it appears that higher interest rates and inflation, a weaker currency and uncertainty about future income (due to fiscal changes) have started to take a toll. A change in government at the start of the year may have also had a negative impact on consumer morale. And with recent government pay rises targeted only at certain professionals, it would appear the consumer is running out of steam.