Romania’s retail sales volume index increased by 1.8% y\/y in the second quarter of the year (Q2), decelerating from +3.5% y\/y in Q1 and +8.6% y\/y in 2024, according to data published by the statistics office INS. In seasonally-adjusted terms, the sales volume inched up by 0.2% q\/q in Q2, after a similarly moderate advance in Q1.<\/p>\n
The retail sales have increased significantly last year, but the fiscal and budgetary reform packages will likely moderate the growth rate at least in the coming quarters, not before a jump expected in July in advance of the August 1 VAT rate hike.\u00a0<\/p>\n
For the whole of 2025, Erste Research estimates a +2.3% rise in retail sales volume in Romania. Persistent high inflation and frozen wages are likely to lead to negative real wage growth in the public sector this year, following a double-digit (+12.5%) real growth in 2024. The real wage growth for the entire economy could be close to zero in 2025 vs +7.4% advance in 2024.\u00a0<\/p>\n
Speaking of monthly readings, retail sales inched up by +1.1% m\/m and +2.5% y\/y in June, the slowest annual pace in one and a half years.<\/p>\n
Actual data came above Erste Research’s forecast of -0.8% m\/m and +0.5% y\/y. The financial group explains that its estimate is based on consumer confidence and business evolution reported by managers in the retail trade sector; therefore, it seems that the actual development reflected an overreaction in the soft data to expected fiscal measures.<\/p>\n
Business and consumer confidence indices have deteriorated significantly in July, heralding the negative mood expected for the following quarters. Retail trade confidence dropped to -5.5 (balance of managers’ net positive responses, in percentage), the lowest level since the end of the first wave of the Covid-19 pandemic. Consumer confidence posted the sharpest deterioration, with the balance plunging to -31.4, its lowest since June 2022 during the outbreak of the war in Ukraine.<\/p>\n
The economic uncertainty already made an impact on households’ consumer confidence in Q2. The non-food sales, the segment best reflecting the consumer confidence, contracted by 0.6% q\/q while the annual increase eased to +4.2% y\/y from +7.8% y\/y in Q1 and +14.8% y\/y in 2024.\u00a0<\/p>\n
The food sales rose by +1.7% q\/q in Q2, reversing a -2.3% q\/q decline in Q1. In annual terms, the households purchased fewer food goods both in Q1 (-0.4% y\/y) and in Q2 (02.0% y\/y). The volume of retail sales has been less sensitive to households’ rising revenues over the past several years, when they increased by rates of around 3%-4% per year.\u00a0<\/p>\n
The car fuel sales posted moderate growth rates of +0.4% q\/q and +0.6% y\/y in Q2, along with rather volatile dynamics over the past years, broadly reflecting the prices but not necessarily a particular upward or downward trend.<\/p>\n