The retail sales volume index in Romania, seasonally and workday adjusted, inched up by 1.3% in the third quarter of the year (Q3) compared to the same period of 2020, according to the data released by the statistics office INS.

Compared to the pre-crisis peak (January 2020), the seasonally adjusted sales volume in September was 6.6% higher - after having constantly advanced through Q3 to a new record. The retail sales dynamics is thus stabilising after the pronounced volatility seen during the first year of the pandemic. 

In annual terms (YoY), the sales index leapt up by 9.4% in Q3 - returning toward more sustainable levels from the unusually high 23.1% YoY spike caused by low base effects in Q2 - one year after the climax of the pandemic. Food sales rose by 8.0% YoY, non-food sales by 11.6% YoY and fuel sales by 7.7% YoY.

The annual growth rate will predictably further ease, compressed by a combination of inflation and rising interest rates.

The rising energy prices impacting households’ budgets directly via utility bills and more generally via consumer prices are likely to dampen the rise of retail sales over the coming quarters.

The headline inflation already hit 6.3% in September and is expected to rise, putting pressure on the wage gains that shrank to 0.2% YoY in July and 1.2% YoY in August (real terms).

After it has recovered this year, when it is expected to grow by 8% on average, the private consumption will slow down to a yet robust growth rate of 5% in 2022 to further slow down to 4.5% in 2025, according to the state forecasting body CNP.

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iulian@romania-insider.com