Romanians’ appetite for consumption remains intact in May

The retail sales index in Romania rose by 18.4% y/y in May, a figure that is still contaminated by base effects - after the 43% annual advance posted in April.

The annualized growth over the past rolling two years (an unusual metric used to filter out the effects of last year’s lockdown, at the expense of losing short-term developments) was 5.3%, which compared to the 7.3% y/y in April might give the impression that the private consumption is somehow losing momentum after the post-crisis recovery.

While this might be true in broad terms, after magnifying the picture, more relevant details become visible. Firstly, the season-adjusted sales index leapt up by 2.4% m/m in May and over the past four months, it surged by 9.8%, after the retail sales in January 2021 were close to those in January 2020 (so they recovered, in overall terms).

The breakdown by main categories of goods (food, non-food and fuels) reveals that consumer confidence - reflected by the non-food sales, is rising fast. Under the annualized 2-year metric, they advanced by 10% per annum since May 2019 - compared to 3.5% average pace for the food sales and only 1.5% annualized advance for the fuel sales.

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