Private consumption’s post-COVID recovery comes to an end in Romania

Private consumption’s post-COVID recovery comes to an end in Romania
By Iulian Ernst in Bucharest December 6, 2021

Romania’s retail sales index, which reflects the volume of retail sales expressed in comparable prices, contracted in October compared to August by 4.8% in absolute terms and by 1.0% in seasonally adjusted terms, reversing the gain accumulated since May, according to data released by the statistics office INS.

The annual growth rate of the retail sales volume eased to 4.0% y/y in October from 6.8% y/y in September.

Compared to October 2019 (before COVID-19), the increase was 8.1% or 4.0% in annualised terms.

In annualised terms compared to October 2019, food sales rose moderately by 3.7%, sales of non-food goods surged visibly faster by 8.4% and fuel sales contracted by 3.3% under direct and indirect mobility constraints.

As regards post-lockdown developments, retail sales recovered robustly from the weak performances during the first stages of the pandemic until May this year.

The propensity for consumption was meanwhile depressed by a multitude of factors including slower nominal wage growth, rising inflation, negative expectations particularly in regard to energy prices and interest rates.

The outlook was complicated once the new variant of COVID-19 generated more caution as regards 2022, previously seen as the year of recovery.