Consumer spending: Romania’s retail turnover posts slowest growth rate in 8 months on lower fuel sales

The retail sales, a key index of consumer market, rose in May by 3.9 percent year-on-year in Romania, the slowest pace since September, mainly due to lower fuel sales, according to a National Institute of Statistics (INS) report.

The retail sales growth rate slowed down in May from 7.1 percent in April, 8.7 percent in March and 9.3 percent in February.

Retail trade was sustained in May by sales of non-food products, which rose by 8.5 percent year-on-year, and by sales of food products (+3.7 percent). Sales of fuels declined by 3 percent.

Compared with April, the retail trade decreased in May by 0.8 percent, the second decrease in a row, in seasonally adjusted series.

The Romanian government has adopted during the last few years a strategy of wage-led growth, stimulating household consumption and GDP growth rates. But this model has generated larger fiscal and current account deficits.

Last year, the retail trade growth rate slowed down to 5.4 percent – the slowest pace in 5 years -, from 10.8 percent in 2017.

Romania’s consumer market rose by 7 percent last year to EUR 123 billion on higher earnings but experts point out that there are already signs that households’ spending loses steam.