The turnover volume index of Romanian companies that deliver services to households contracted by 13.1% y/y in January after a major 8.5% m/m (seasonally and workday adjusted) plunge in January, according to data published by the statistics office INS. The reading reflects households’ increased propensity for saving ahead of rising uncertainty, also seen in the 9.1% y/y (3.7% m/m) drop in retail sales volume.

The volume of services to households, rather steady over 2023-2024 and during the first half of 2025, already plunged by 7.0% m/m in August in response to higher VAT rates and rising inflation eroding households’ earnings. At that time, the general VAT rate rose from 19% to 21% and more than doubled from 5% to 11% for HoReCa.

The HoReCa sector posted a steeper contraction over the past year, after strong expansion stimulated by government schemes in 2023-2025.

In the HoReCa sector, the contraction was slightly stronger than the average: 15.8% y/y and 10.1% m/m. However, this was partly due to high base effects.

The turnover of companies in HoReCa, supported by stimulus schemes financed by the government, has rebounded more strongly during 2022-2023 compared to the retail sales. In 2024 and until the first half of 2025, the volume of HoReCa services consumed by households ranged around 40%-50% above the 2019 average, while the retail sales were only around 30% above the 2019 average. 

The consumption of HoReCa services has quite unexpectedly declined slightly during 2024, at a time when the strong rise in households’ incomes surfaced in higher sales of (discretionary) non-food goods. While the sales of non-food goods soared by 23% y/y in 2024, the consumption of HoReCa services contracted by 1.5% y/y.

The consumption of travel services abroad, as reported by the National Bank of Romania (BNR), increased by 3% y/y (in euros) in 2024, which is far from matching the rise in non-food sales. 

Consumption of domestic (HoReCa) services was compensated for by more purchases of travel services abroad. Quite interestingly, the reported consumption of travel services abroad surged in July and August 2025 – in contrast to the expected contraction in overall household consumption. The purchase of travel services abroad has again risen by 11.5% y/y in January, again in contrast to the domestic consumption of services (particularly HoReCa).

iulian@romania-insider.com

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