Private consumption shrinks by 3%-4% in Romania after August fiscal corrective package

The retail sales volume index in Romania contracted by 4.7% y/y in November 2025 – the fourth consecutive month with a negative annual dynamics – after the VAT rate hike in August and the gloomy economic outlook eroded households’ real incomes and depressed their propensity for consumption. In seasonally-adjusted terms, the retail sales index remained constant compared to October, according to data published by the statistics office INS.

Consumer prices increased by 5.9% in July, when electricity prices were deregulated, and in August, when the VAT rate was hiked from 19% to 21% – reaching a level that was, in July-November 2025, 5.9% above the level seen in the first part of the year. The rise was steeper for the non-food goods (+7.6%) compared to the more moderate advance (+3.7%) of the food prices due to the control maintained by the government on the price of the basic goods.