Retail sales growth in Romania slows to 1.8% year-on-year during the second quarter
Romania's Retail Sales Show Mixed Results Amid Economic Challenges
According to Erste Research, Romania's retail sales saw a mixed performance in June. The forecast for monthly growth was -0.8% m/m, but the actual figures showed a slight increase of 1.1% m/m. Year-on-year, retail sales grew by 2.5%. However, this growth rate represents the slowest annual pace in one and a half years.
In the second quarter of the year, the retail sales volume index increased by 1.8% y/y. Yet, the growth in food sales was less robust, with households purchasing fewer food goods both in Q1 (-0.4% y/y) and Q2 (-2.0% y/y). On the other hand, car fuel sales posted moderate growth rates of +0.4% q/q and +0.6% y/y in Q2.
Erste Research estimates a +2.3% rise in retail sales volume for the whole of 2025 in Romania. However, they note subdued retail sales momentum and diminished consumer confidence, with retail trade confidence plunging to its lowest level since the first COVID-19 wave. This cautious consumer sentiment is reflected in the retail trade confidence dropping to -5.5% in July, the lowest level since the end of the first wave of the pandemic.
The consumer confidence index posted the sharpest deterioration, with the balance plunging to -31.4, its lowest since June 2022 during the outbreak of the war in Ukraine. The overreaction in the soft data to expected fiscal measures might have influenced the actual development of retail sales.
Despite the mixed results, the overall economic growth and retail prospects are subdued. GDP growth is expected at a modest 0.3% for 2025. Erste Research notes negative dynamics in most economic sectors, including retail, linked to fiscal consolidation measures and weakened consumer confidence.
Persistent high inflation and frozen wages are likely to lead to negative real wage growth in the public sector in 2025. The volume of retail sales has been less sensitive to households' rising revenues over the past several years.
In Q2, the retail sales volume inched up by 0.2% q/q. Non-food sales contracted by 0.6% q/q in Q2, while the annual increase eased to +4.2% y/y from +7.8% y/y in Q1 and +14.8% y/y in 2024. Food sales, however, showed a positive quarterly growth of +1.7% q/q in Q2, after a -2.3% q/q decline in Q1.
In the first half of 2025, retail sales grew by 3.4% year-on-year. Erste Research does not provide a direct numeric projection for Romania's total retail sales volume specifically for 2025 in the available search results.
In conclusion, while Romania's retail sales show mixed results, the overall outlook for 2025 indicates modest growth but tempered by low consumer confidence and economic risks. The retail trade confidence and consumer confidence indices reflect this cautious sentiment, with retail trade confidence dropping to its lowest level since the end of the first wave of the pandemic and consumer confidence posting its sharpest deterioration since June 2022.
In the face of ongoing economic challenges, the growth in Romania's retail sales sector shows a slight improvement, with a projected increase of +2.3% in retail sales volume for 2025 according to Erste Research. However, this growth rate is expected to be influenced by subdued retail sales momentum, diminished consumer confidence, and negative dynamics in most economic sectors.
In light of persistent high inflation and frozen wages, negative real wage growth in the public sector is likely in 2025, which might further impact the personal-finance sector and the overall consumer spending habits.
