GfK: Consumption desire in Romania declines by 22 percent in unfavorable European context

The purchase desire in Romania has plummeted by 22.5 percent while expectations regarding the state of the economy have dipped by 16.1 percent and expectations regarding revenues have also decreased by 5.3 percent, according to the conclusions of the survey The Consumption Climate in Europe carried out by GfK.

In the first quarter of the year, the Romanian GDP increased only by 0.7 percent on the previous quarter and only by 2.6 percent on the same period last year.

The unemployment rate continues to grow and currently is around 7.5 percent, according to Eurostat.

The inflation rate is climbing. Currently, the inflation rate is 4.4 percent, being one of the highest in Europe.

Many Romanians are counting on the fruit and vegetables they cultivate in their own garden and are most affected when the price of food goes up. The money they earn does not cover more than the everyday basics, which has led to a 22.5 drop in the purchase desire.

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States in Eastern Europe must invest in economic growth. While in the past, ex-communist countries focused on savings, recently, the cost-reduction policy has been detrimental to them, according to the survey

In the first quarter of the year, Poland has displayed minimum economic growth while the situation in the Czech Republic deteriorated visibly.

Hungary managed to get out of recession.

In Bulgaria, the poorest country on the EU, the austerity measures were successful. The government implemented a 15 percent cost reduction in the public administration, and this led to an improvement in the country’s financial situation. The public debt is currently 20 percent of the GDP and the budget deficit is lower than 2 percent of the industrial production. On the other hand, the unemployment rate went up to two digits and approximately one fifth of the country’s population lives in poverty.

The European consumption climate is generally unfavorable. In most European countries, citizens are forced to keep their finances in check and function on a very strict budget.

While the Germans (36.5 percent), the Austrians (11.6 percent) and the Bulgarians (2.6 percent) are still spending  a lot, consumers in Italy (minus 49 percent), Portugal (minus 43.2 percent) and France (minus 42.2 percent) are saving drastically.

Europe is plagued by a high unemployment rate and low financial indicators in many of the 12 European countries monitored in the survey.

Otilia Haraga