Romania's retail sales index increased by 1.5% in January-February compared to the same period last year.

The overall growth underestimates the consumers' sentiment since it is still dragged down by subdued (-7.5% year-on-year) fuel sales as an effect of mobility constraints and remote work.

In contrast, the volume of non-food sales increased more robustly by 6.3% yoy in the first two months of the year (+7.1% yoy in February).

The volume of food sales increased in line with the average, by 1.4% yoy in January-February.

However, the retail sales have lost momentum compared to the last quarter of 2020, when the index advanced by 3.8% yoy, and 10.2% yoy on the non-food sales segment.

One of the drivers behind more moderate sales growth after January 2021 is the households' conservative income expectations.

The wages still increased by a real rate of 3.4% yoy in January, but the expectations are rather pessimistic in both the private and public sectors.

The state forecasting and strategy body CNSP projects a 2% real advance in net wages this year, half of last year's 4% advance.

(Photo: Shutterstock)

andrei@romania-insider.com