Romania’s retail sales MoM data for December 2025, sourced from the Sigmanomics database, revealed a -1.10% contraction, sharply below the 0.50% forecast and following a 1.30% rise in November. This decline interrupts a fragile recovery after October’s steep -4.00% drop. Over the past year, retail sales have averaged near zero growth, underscoring persistent volatility in consumer spending amid macroeconomic headwinds.

Drivers this month

• Lower household disposable income due to inflation pressures.
• Rising interest rates dampening credit-financed consumption.
• Seasonal post-holiday spending normalization.

Policy pulse

The current reading sits below the National Bank of Romania’s inflation target range (2.50% ±1%), reflecting cooling demand that may ease inflationary pressures. However, the central bank’s recent rate hikes to 7.50% continue to restrain consumer credit growth.

Market lens

Immediate reaction: The RON depreciated 0.30% against the EUR, while 2-year government bond yields rose 5 bps within the first hour post-release, signaling cautious investor sentiment.

Retail sales are a core macroeconomic indicator reflecting consumer demand, a key driver of GDP growth in Romania. The latest -1.10% MoM decline contrasts with the 1.30% gain in November and the 12-month average of approximately 0.00%. This volatility aligns with other indicators: inflation remains elevated at 8.10% YoY (November 2025), while unemployment holds steady at 5.20%, per Sigmanomics data.

Monetary Policy & Financial Conditions

The National Bank of Romania’s tightening cycle, with the policy rate at 7.50%, aims to curb inflation but also raises borrowing costs. Consumer credit growth slowed to 3.20% YoY in November, down from 5.00% earlier in the year, constraining retail spending.

Fiscal Policy & Government Budget

Fiscal consolidation efforts, including reduced subsidies and higher taxes on select goods, have tightened household budgets. The government’s budget deficit narrowed to 3.10% of GDP in Q3 2025, limiting fiscal stimulus capacity.

External Shocks & Geopolitical Risks

Regional tensions and supply chain disruptions continue to pressure prices and consumer confidence. Energy price volatility remains a key risk factor for disposable incomes and retail demand.

Historical comparisons reveal that retail sales have struggled to maintain positive momentum since mid-2025. For instance, April and May saw declines of -1.00% and -0.30%, respectively, while August and November posted modest gains of 1.10% and 1.30%. The volatility reflects shifting consumer behavior amid economic uncertainty.

Market lens

Immediate reaction: EUR/RON rose 0.30%, reflecting a weaker RON post-release. The 2-year Romanian government bond yield increased by 5 basis points, indicating higher risk premiums and cautious investor positioning.

Looking ahead, Romania’s retail sales trajectory hinges on several factors. Inflation is expected to moderate gradually from 8.10% to around 5.50% by mid-2026, which could relieve pressure on household budgets. However, continued monetary tightening and fiscal restraint may weigh on consumption.

Bullish scenario (20% probability)

• Inflation falls faster than expected, boosting real incomes.
• Monetary policy eases in H2 2026, lowering borrowing costs.
• Retail sales rebound with 0.50–1.00% monthly gains.

Base scenario (60% probability)

• Inflation declines steadily but remains above target.
• Monetary policy remains restrictive through 2026.
• Retail sales hover near zero growth, with occasional volatility.

Bearish scenario (20% probability)

• Inflation remains sticky above 7%, eroding purchasing power.
• Geopolitical shocks disrupt supply chains and energy prices.
• Retail sales contract further, with monthly declines of 0.50–1.50%.

Overall, risks are skewed slightly to the downside given external uncertainties and tight financial conditions. However, a gradual easing of inflation and stable fiscal policy could support a modest recovery in consumer spending by late 2026.

Romania’s December 2025 retail sales MoM contraction highlights the challenges facing consumer demand amid a complex macroeconomic backdrop. The data from the Sigmanomics database confirms a volatile retail environment shaped by inflation, monetary tightening, and fiscal consolidation. While the near-term outlook remains cautious, improving inflation dynamics and stable financial conditions could pave the way for a gradual recovery.

Investors and policymakers should monitor retail sales closely as a barometer of domestic demand and inflationary pressures. The interplay between monetary policy and consumer behavior will be critical in shaping Romania’s economic trajectory in 2026.

Key Markets Likely to React to Retail Sales MoM

Romania’s retail sales data influences several financial markets, reflecting the country’s economic health and monetary policy outlook. The following symbols historically track or react to retail sales fluctuations:

• FP – Romania’s largest oil and gas company, sensitive to consumer demand and energy prices.
• EURRON – The EUR/RON currency pair reacts to shifts in economic sentiment and monetary policy.
• BRD – A major Romanian bank, impacted by credit growth and consumer spending trends.
• BTCUSD – Bitcoin’s price often reflects broader risk sentiment, including emerging market data.
• USDRON – The USD/RON pair is sensitive to capital flows and economic fundamentals.

FAQs

What is the significance of Romania’s Retail Sales MoM data?

Retail Sales MoM measures monthly changes in consumer spending, a key driver of economic growth and inflation trends in Romania.

How does the Retail Sales MoM impact Romania’s monetary policy?

Stronger retail sales can signal rising inflationary pressures, prompting the central bank to tighten policy, while weaker sales may ease inflation concerns.

What are the risks to Romania’s retail sales outlook?

Risks include persistent inflation, geopolitical shocks, tighter credit conditions, and fiscal austerity, all of which can dampen consumer demand.

Takeaway: Romania’s retail sales contraction in December 2025 signals cooling consumer demand amid inflation and monetary tightening, with risks skewed to the downside but a potential recovery on the horizon.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.