Although retail sales in Romania increased by 8.9% in 2015, they still need 1.6% more to match the 2008 level. Domestic consumer spending used to be the main growth driver of the local economy during the boom years, relinquishing that position to exports and agriculture afterwards.
However, consumer spending regained the top spot in 2015, due to the not so good agricultural year compared with 2014, after the drought hit local crops. Exports, the main growth driver in 2014 increased by 7% in January-November 2015, according to the latest data available.
Consumer spending is now expected to push the economic growth towards 4% in 2015 and to 4.1% (government calculations) or 4% to 5% (macroeconomics experts’ forecasts) this year.
“This (the trend of overall consumer spending in 2015 and especially at the end of the year i.e.) means GDP growth prospects in the fourth quarter improved from 4.2%, while agriculture will not have a negative impact,” says Silviu Pop, junior economist with ING Bank Romania.
Consumer spending rose by almost 9% in 2015, the highest growth after 2008, the last year of economic boom, driven by the rise in food, beverage and tobacco sales especially after June 1, following the enforcement of the VAT cut.
