Romania’s retail sales volume index (chart) increased by 5.3% year on year (y/y) in July, supported in part by favourable base effects in fuel sales, the National Institute of Statistics (INS) reported on September 4. Adjusted for seasonality and working days, retail trade (+0.3% m/m) reached a new record level.

Despite the July increase, prospects remain subdued. The recent VAT and excise duty hikes are expected to have a certain impact, but slower household income growth is expected to particularly weigh on consumption. Wages in the public sector and pensions are forecast to remain flat in 2026, contributing more than a third — or 1.2% of GDP — to the 3.35% fiscal consolidation planned under the government’s first reform package. Overall, the wages are seen as slowing down amid adverse economic performance.

Retail sales have largely stabilised within a narrow range over the past three quarters, following stagnation in real wages since March 2024 (chart).

Food sales rose 1.3% y/y in July but have shown little momentum over the past 12 months. Non-food sales, up 5.3% y/y in July, show still robust consumer confidence, although their growth has slowed since autumn 2024 after a period of expansion supported by lower interest rates during the first part of last year.

Fuel sales increased by 11.5% compared with July 2024, a figure partly explained by last year’s unusually weak base. INS data showed a combined 3.1% advance in June and July, suggesting a modest upward trend. However, fuel sales have otherwise remained broadly within the same range for the past four years, with fluctuations driven by price changes and other factors.

INS figures confirm that, while consumption remains resilient, the broader outlook for retail is shaped by household income stagnation and the fiscal consolidation measures planned for 2026.