Romania’s retail sales growth rate slows down to 5.4 pct in 2018, the lowest pace in 5 years

The retail sales, a key index of consumer market, rose by 5.4 percent year-on-year in 2018 in Romania, the slowest pace since 2013, according to a National Institute of Statistics (INS) report released on Tuesday.

Last year, the retail trade growth rate slowed down to 5.4 percent, from 10.8 percent in 2017.

In December, the retail sales slowed down to 4 percent year-on-year, the slowest pace in 3 months.

December is the best month in terms of retail sales in a year and this deceleration could weight on the gross domestic product (GDP) value for 2018.

Retail trade was sustained in December by food, beverages and tobacco sales, which rose by 4.7 percent year-on-year, and by sales of non-food products (+4.1 percent).

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Sales of fuels increased by 2.5 percent year-on-year in December.

Compared with November, the retail trade declined in December by 1 percent in seasonally adjusted series – the first decline in 4 months.

Romania’s consumer market increased with more than EUR 10 billion in 2017, to EUR 114.8 billion, due mainly to higher wages paid by employers, recent Eurostat data show.

The “final consumption expenditure of households” index, a measure of consumer market, rose from EUR 96.4 billion in 2015 to EUR 104.1 billion in 2016 and to EUR 115.2 billion in 2017, according to Eurostat statistical 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.