Romania’s retail sales gain momentum to 9.7% y/y in Q2

Romania’s retail sales index gained momentum to 9.7% y/y in Q2 after the already robust 6.4% y/y advance in Q1 and confirmed private consumption’s leading role in the country’s economic growth this year.

Retail sales had gradually lost momentum from 10.2% y/y in 2021 (post-COVID revenge buying) to 4.5% y/y in 2022 and 1.6% y/y in 2023, in line with the high inflation and subdued consumer confidence.

The beginning of 2024 marked a visible resumption in consumer confidence and this was particularly visible in the sales of non-food goods: +12.3% y/y in Q1 and +13.5% y/y in Q2 after the average +2.8% y/y advance in 2023.

The robust rise of non-food sales concomitant with above-average advances in the prices for this category of goods (with above-average elasticity to prices) suggests outstanding demand-side pressures generated by the real positive gains of the incomes of at least part of the households.

The wages posted a real positive annual advance of 6%-7% y/y in Q1 and above 7% y/y in April-May. Q2 was thus the fifth quarter with a positive annual real rise in wages, which must have consolidated consumer confidence at a time when the inflation seems to have been brought under control.

The food sales increased by 6.1% y/y in Q2, after the more modest +1.7% y/y advance in Q1. Although modest compared to the outstanding advance in non-food sales, food sales posted a performance nearly twice as high as last year (+3.5% y/y).

The retail sales of car fuels returned closer to the levels seen in 2022 after the sudden slump in 2023 and posted a robust +8.0% y/y growth in Q2.

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