Romania's retail sales index increased by 1.5% y/y in January-February compared to the same period last year.
The growth is softer than the robust advance in the final quarter of last year and roughly one-tenth of the double-digit growth rate posted in the same period last year — but certainly good news under the current circumstances.
The overall growth underestimates consumer sentiment since it is still dragged down by subdued (-7.5% y/y) 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% y/y in the first two months of the year (+7.1% y/y in February).
The volume of food sales increased in line with the average, by 1.4% y/y in January-February.
However, retail sales growth has lost momentum compared to the last quarter of 2020, when the index advanced by 3.8% y/y, and 10.2% y/y on the non-food sales segment.
One of the drivers behind more moderate sales growth after January 2021 is households' conservative income expectations.
Wages still increased by a real rate of 3.4% y/y in January, but 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.