Romania’s retail sales volume index increased by 2.2% y/y in October, the statistics office reported. This is a rather good performance compared to the 0.6% y/y contraction of the index in Jan-Sep, but it has to be confirmed by a further advance of sales in the coming months.

Indeed, there are grounds to believe that retailers have pushed up sales towards the end of the year by price cuts in order to boost their businesses amid sluggish demand. Nonetheless, on medium term there are no drivers for a sustainable resumption of domestic demand. Consumers’ confidence remains particularly low and much of the growth [expected to hit 2.5% this year] was in fact driven by agriculture thus having no impact on households’ incomes.

The seasonally and workday adjusted index edged up by 0.4% m/m but remains broadly close to the same level where it has hovered over the past 12 months. Under a broader perspective, the retail sales have stagnated over the past year around the level reached in mid-2010, before the fiscal austerity package. The index plunged as a result of the austerity package but later recovered – yet, it has not managed yet to exceed that level that is still well below the per-crisis [mid-2008] levels.