Romania’s retail sales continue to weaken on flat fuel spending

The retail sales, a key index of consumer market, rose in June by 4.9 percent year-on-year in Romania, the second-slowest pace since December, mainly due to flat fuel sales, according to a National Institute of Statistics (INS) report.

The retail sales growth rate slowed down in May to 4.1 percent, from 7.3 percent in April, 8.7 percent in March and 9.3 percent in February, and maintain the slow pace in June.

Retail trade was sustained in June by sales of non-food products, which rose by 7.8 percent year-on-year, and by sales of food products (+4.6 percent). Sales of fuels were almost flat (+0.8 percent).

Compared to May, the retail trade rose in June by 1.3 percent, after two months of decline, 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.