Romania’s retail sales index, expressed in comparable prices, increased by 5.9% y/y in the last quarter of 2018. The growth rate for the whole year was 5.5% compared to 2017, which marked a significant slowdown from the double-digit growth rates in 2016-2017.
The growth of sales in 2018 was visibly driven by higher wages (+8% y/y in real terms, for January-November) and higher employment (+1.8% y/y again for January-November), but also by more abundant consumer lending. In fact, both the aggregate net wages and the volume of consumer loans have increased by double-digit real rates, making the 5.5% y/y rise of sales rather modest.
Both drivers, real wages and consumer lending, gained momentum in the last quarter of the year, which resulted in retail sales accelerating to 5.9% y/y in the quarter, from 3.9% y/y in Q3. The volume of new consumer loans soared by more than 35% y/y to RON5.45bn in Q4, dwarfing the headline inflation rate of around 3%. Net wages increased by more than 9% y/y in real terms in October and November, accelerating from an average advance of 7.8% y/y in Q3.