The retail sales volume index in Romania increased by 2.5% y/y in July, the weakest annual growth rate in over six quarters and half the average annual growth in Q1 or Q2 this year but among the strongest in Europe.
The seasonally-adjusted retail sales index edged up a modest 0.2% m/m after the 2.0% contraction seen in June, according to the statistics office INS.
Households’ purchasing power is being eroded by the rising inflation (+15% y/y in June-July). But retail sales are still sustained by expectations about even higher prices of the consumer goods in the coming period.
“Romania's economy has entered a slowdown process, and the trend will continue,” according to Adrian Codirlasu, vice-president of CFA Romania.
Consumption has already reached significantly higher levels than before the pandemic, but the recovery stage is over, he says, quoted by Economedia.ro.
The non-food retail sales posted modest but positive growth rates of 1%-2% in both June and July (+1.4% y/y in July), demonstrating more cautious spending behaviour of households.
Food sales increased comparatively faster compared to both previous quarters and non-food sales, still at a moderate 3.0% y/y rate in July.
Not fully recovered after the lockdown period in 2020 hence at a modest level in absolute terms, the sales of car fuels increased by 3.7% y/y in July, faster than the average retail sales index but still a fraction of the robust (+9% y/y) growth rates in both Q1 and Q2.