Retail sales volume in Romania (chart) increased by 4.1% year on year in January, half the 8.6% y/y advance in 2024 and 9.2% y/y in Q4 2024, according to data published by the statistics office. 

In seasonally and workday adjusted terms, the retail sales inched up by 0.1% m/m.

The slowdown was visible in both food and non-food segments of the market, while the fuel sales increased by 7.6% y/y (+0.5% month on month).

Food sales posted a negative annual growth rate (-0.9% y/y) in January for the second consecutive month while the non-food sales weakened to +7.0% y/y in January from +15.8% y/y in December.

The analysts of Erste Group in a research note said they expect a deceleration in retail sales growth to +4.5% in 2025 from +8.6% in 2024. The growth rate looks still solid, compared to the plunge predicted by the state forecasting body CNP for the real wages: +1.6% in 2025 from +8,6% in 2024. The lower advance in the households' wage incomes might be offset by the lower loan interest rates, thus more affordable consumer loans. It will eventually all depend on the consumer confidence, highly unpredictable due to the high economic and political volatility.

Romania’s retail sales rose by +5.1% per annum over the past five years (2024 compared to 2019), therefore the 4.5% y/y performance predicted by BCR Research for 2025 would translate into a moderate slowdown.

The risk balance is skewed to the downside due to ongoing fiscal consolidation and political uncertainty in the first half of the year, the analysts of the Austrian financial group say. 

Households' savings buffers should partially cushion the effects from tighter fiscal and income policies according to their forecast.

Consumer and retailers’ confidence improved in February, hinting at possible improvement of the market in the second month of the year.

Consumer confidence increased to -17.0 in February from -20.3 in January. Nevertheless, households are more likely to remain prone to saving, given the still high uncertainty.

Retail trade confidence rose to 8.5 in February from 8.0 in the previous month. Stronger business expectations by managers offset weaker past activity and higher inventories.