Retail sales in Romania (chart) surged by 8.6% y/y in 2024 in volume terms, driven by the double-digit (+14.8% y/y) rise in non-food sales according to data published by the statistics office INS.

The private consumption was driven up by the 7.6% y/y rise in the real net wage and the unusually sharp rise in the volume of “new consumption loans”: +73% y/y to RON47.0bn (€9.5bnn) in 2024, counting only local currency denominated lending. The “new consumption loans”, although including a significant volume of refinancing, account for a significant volume in relative terms: roughly 1.5 months of net wages earned by the 5.75mn employees in the country.

Non-food sales advanced by a more modest rate, by only 3.8% y/y while the sales of car fuels advanced by 3.6% y/y.

Romania’s private consumption thus accelerated in 2024, from a modest 1.6% y/y advance in 2023 and 4.5% y/y in 2022, returning to its buoyant performance after the slowdown caused by the war in Ukraine intermediated by the higher lending rates and lower real wages: the net wages contracted by real 1.4% y/y in 2022, but gradually returned to growth in 2023-2024.

Private consumption is expected by the state forecasting body CNP to lose momentum in 2025, to a real advance of only 2.5% from 5.3% in 2024. Although lending may remain robust, wages will probably rise at lower rates: by some 2.2% in real terms, according to CNP’s forecast.