Romania’s retail sales up 9.4% y/y in Q3, but keep moderating

Romania’s retail sales up 9.4% y/y in Q3, but keep moderating
By bne IntelliNews November 8, 2021

The retail sales volume index in Romania, seasonally and workday adjusted, inched up by 1.3% y/y in Q3, according to data released by the statistics office INS.

Compared to the pre-crisis peak (January 2020), the seasonally adjusted sales volume in September was 6.6% higher, after having constantly advanced through Q3 to a new record.

The rise in retail sales is thus stabilising after the pronounced volatility seen during the first year of the pandemic. The growth rate remains robust, not yet showing the expected effects of the energy prices driven inflation.

In annual terms, the sales index leapt up by 9.4% y/y in Q3 — returning toward more sustainable levels from the unusually high 23.1% y/y spike caused by low base effects in Q2, one year after the climax of the pandemic.

Food sales rose by 8.0% y/y, non-food sales by 11.6% y/y and fuel sales by 7.7% y/y.

The annual growth rate is expected to ease further, compressed by a combination of inflation and rising interest rates. The rising energy prices impacting households’ budgets directly via utility bills and more generally via consumer prices are likely to dampen the rise of retail sales over the coming quarters.

The headline inflation already hit 6.3% in September and is expected to rise, putting pressure on the wage gains that shrank to 0.2% y/y in July and 1.2% y/y in August (real terms).

After it has recovered this year, when it is expected to grow by 8% on average, the private consumption will slow down to a yet robust growth rate of 5% in 2022 to further slow down to 4.5% in 2025, according to the state forecasting body, CNP.