The retail sales volume index, seasonally adjusted, contracted by 0.9% m/m in January returning to the level of November 2021 and consolidating the stationary dynamics, according to the latest data released by the statistics office INS.

Rising energy bills and high inflation, in general, resulted in a dwindling propensity for consumption.

As the uncertainty remains high in terms of inflation and energy bills, particularly after the Russian invasion in Ukraine, households’ consumer confidence is unlikely to strengthen significantly over the coming quarters.

Just like the government itself, the households are likely to remake their yearly budgets in line with the slower growth expected and higher risks ahead.

The seasonally-adjusted retail sales index has hovered around the same level, within a narrow band, during the second half of 2021 as the uncertainty about inflation and energy bills depressed households’ propensity for spending.

In annual terms, the retail sales in Romania increased by 3.4% y/y as of January 2022, while the index advanced by 7.0% compared to January 2020.

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iulian@romania-insider.com