Romanian retail trade expands despite austerity measures

According to detailed data, food retail sales rose 0.5 percent, non-food sales rose 5.8 percent, and fuel sales rose 11.9 percent. Compared to June, the raw data showed a 7.1 percent increase, while the seasonally and calendar-adjusted data showed a 0.3 percent increase.

While the current growth is strong in the region, a multi-year comparison shows a slowing trend: last fall, sales were still above 10 percent, partly due to election campaign measures.

Record-breaking cuts

The Romanian government has decided on significant austerity measures in recent weeks: raising the general VAT rate to 21 percent, reducing the number of municipal and public administration jobs, raising taxes on multinationals and stock market profits, and tightening social security contributions for self-employed people. In addition, the retirement age for judges and prosecutors is being raised to 65, and pensions are being capped.

According to analysts, these measures could significantly dampen consumption in the short term, with the retail sector set to suffer a significant decline in the coming months.

Regional comparison

Romania’s 4.5 percent growth stands out among the data for several countries in the region. Croatia recorded only 1.4 percent growth in July, while Slovakia has already recorded a series of declines this year. Poland, on the other hand, showed a 4.8 percent increase in July, one of the strongest results in the region.

In Hungary, retail sales increased by 1.7 percent year-on-year in July, according to data from the Central Statistical Office (KSH). August figures are expected to be influenced by back-to-school shopping and the 30,000-forint shopping voucher distributed to pensioners.
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