Private consumption is the most important economic branch, which makes up almost 60% of Romania’s gross domestic product (GDP), in terms of GDP usage.
Data is better than financial analysts’ expectations, according to Ziarul Financiar (ZF) daily. At end-2022 and early 2023, economists, including Romania’s central bank analysts, said the advance of consumption would see a significant slowdown in 2023, which will trigger a sudden economic slowdown. Predictions can still come true and con¬sumption may slow down, but, the first data of January 2023 shows that retailers’ sales accelerated.
Salaries in the private sector, which grew in 2022, probably were the main driver of private consumption in January, according to Adrian Codirlasu, vice-president of CFA Romania.
“Compared to December 2022, the annual growth rate of private consumption almost doubled. At the beginning of 2022, consumption was the economic growth driver. I would say that private sector salaries grew last year and covered the bulk of price increases. The economy grew, the growth rate is substantial and thus triggers more confidence in the economy and implicitly higher consumption levels.”
Food sales gained momentum in January and saw a 5.4% increase, after dropping in December 2022. Apparel and footwear sales saw the biggest sales growth, of 28%. If the 15% inflation is added to the final price, for instance, the increase in apparel sales exceeds 40% in January 2023 compared to January 2022. Fuel sales, instead, inched down 0.4%.
Retail sales are among the first relevant data about the status of the economy in 2023 and the start is good, accelerating versus the end of 2022 when everybody was expecting rather a slowdown.