Romania’s retail sales index, expressed in comparable prices, increased by 5.9% in the last quarter of 2018 compared to the same period of 2017 (y/y terms).

The growth rate for the whole year was 5.4% compared to 2017, which marked a significant slowdown from the double-digit growth rates in 2016-2017.

On the one hand, the rise in households’ disposable incomes expanded at a slower rate in 2018 compared to the previous years, but on the other hand, the consumer confidence has deteriorated amid increasing uncertainties related to interest rates, exchange rates, and further wage hikes.

The average net wage rose indeed by 8.0% y/y in January-November last year (latest data available), but this compares to 14% in 2017 and 13% in 2016. Certain strengthening of the real wages in the last quarter of 2018 (Q4) pushed up the retail sales increase above the year’s average (and from the disappointing 3.2% y/y advance in Q3).

The robust consumer lending in the quarter (and in 2018 as a whole) also supported the retail sales, which would have depressed even more otherwise. Namely, the volume of new consumer loans extended by banks soared by 35% y/y (nominal terms, or some 30% y/y in real terms) in Q4 and by 19% y/y (nominal terms, or some 15% real terms) for the whole year.

editor@romania-insider.com

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