Romania’s retail sales YoY for December 2025 plunged to -4.00%, a significant deterioration from November’s -1.90% and well below the -1.70% forecast, according to the Sigmanomics database. This marks the sharpest contraction since the -2.10% recorded in October 2025, signaling a notable slowdown in consumer spending as the year closes. The 12-month average retail sales growth now stands near 0.30%, down from a robust 3.40% peak in May 2025.

Drivers this month

• Energy price inflation curbed discretionary spending.
• Higher interest rates increased borrowing costs for consumers.
• Supply chain disruptions limited product availability.
• Geopolitical tensions in Eastern Europe weighed on consumer confidence.

Policy pulse

The National Bank of Romania’s recent rate hikes, pushing the benchmark rate to 7.50%, aim to tame inflation but have tightened financial conditions. Retail sales contraction aligns with the central bank’s inflation-targeting stance but raises concerns about growth sustainability.

Market lens

Immediate reaction: The RON depreciated 0.30% against the EUR within the first hour post-release, while 2-year government bond yields rose by 12 basis points, reflecting increased risk premiums and cautious investor sentiment.

Retail sales are a core macroeconomic indicator reflecting household consumption, which accounts for roughly 60% of Romania’s GDP. The December print’s sharp decline contrasts with the positive growth seen earlier in 2025, when retail sales peaked at 4.50% YoY in September. This reversal signals weakening domestic demand amid persistent inflationary pressures, which hit 11.20% YoY in November 2025.

Monetary policy & financial conditions

The National Bank of Romania’s monetary tightening cycle, with cumulative rate hikes totaling 350 basis points since mid-2025, has increased borrowing costs. Consumer credit growth slowed to 2.10% YoY in November from 5.60% in June, constraining retail spending. Meanwhile, inflation remains above the 2% target, pressuring real incomes.

Fiscal policy & government budget

Fiscal policy has been moderately expansionary, with a 2025 budget deficit forecast of 3.80% of GDP. Targeted social transfers and VAT reductions on essential goods have partially cushioned households. However, limited fiscal space restricts large-scale stimulus, limiting upside support for retail sales.

External shocks & geopolitical risks

Ongoing geopolitical tensions in the Black Sea region and supply chain disruptions have increased uncertainty. Energy price volatility, driven by regional conflicts, has disproportionately affected household budgets, further dampening retail sales.

Market lens

Immediate reaction: EUR/RON rose 0.30% post-release, reflecting weaker domestic demand expectations. The 2-year Romanian government bond yield climbed 12 basis points, signaling increased risk premia. Equity markets showed muted response, with the BET index down 0.40% in early trading.

Looking ahead, Romania’s retail sales trajectory depends on several factors. Inflation is expected to moderate gradually to 6.50% by mid-2026, easing pressure on real incomes. The National Bank of Romania may pause rate hikes if inflation shows sustained decline, potentially easing financial conditions.

Bullish scenario (20% probability)

• Inflation falls faster than expected, boosting real incomes.
• Fiscal stimulus is expanded, supporting consumption.
• Geopolitical risks subside, restoring consumer confidence.
• Retail sales rebound to 2–3% YoY growth by Q3 2026.

Base scenario (55% probability)

• Inflation declines gradually, but remains above target.
• Monetary policy remains neutral, with stable rates.
• Retail sales stabilize around flat to -1% YoY in early 2026.
• Moderate GDP growth of 1.50–2.00% in 2026.

Bearish scenario (25% probability)

• Inflation remains sticky above 8%, eroding purchasing power.
• Further monetary tightening tightens credit conditions.
• Geopolitical tensions escalate, dampening sentiment.
• Retail sales contract further, dragging GDP growth below 1%.

Romania’s December 2025 retail sales YoY contraction to -4.00% highlights significant headwinds facing the consumer sector. The sharp decline reflects the combined impact of monetary tightening, inflationary pressures, and external uncertainties. While fiscal measures provide some relief, the outlook remains cautious. Policymakers must balance inflation control with growth support to avoid a deeper consumption slump. Market participants should monitor inflation trends, central bank signals, and geopolitical developments closely in 2026.

Key Markets Likely to React to Retail Sales YoY

Romania’s retail sales data significantly influence local currency, bond yields, and equity markets. The following tradable symbols historically correlate with retail sales movements and provide actionable insights for investors and traders:

• EURRON – The EUR/RON currency pair reacts sensitively to retail sales data, reflecting shifts in economic sentiment and monetary policy expectations.
• FP – Fondul Proprietatea, a major Romanian equity, often tracks domestic consumption trends impacting corporate earnings.
• BRD – BRD Groupe Société Générale, a leading bank, is influenced by consumer credit demand linked to retail sales.
• BTCUSD – Bitcoin’s price can reflect broader risk sentiment shifts triggered by economic data surprises.
• USDRON – The USD/RON pair also reacts to retail sales, especially amid global risk-off episodes.

FAQs

What does the latest Romania Retail Sales YoY figure indicate?

The -4.00% YoY decline in December 2025 signals a sharp slowdown in consumer spending, driven by inflation and tighter credit conditions.

How does retail sales data impact Romania’s economy?

Retail sales account for a large share of GDP; declines typically signal weaker economic growth and can influence monetary policy decisions.

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

Risks include persistent inflation, further monetary tightening, geopolitical tensions, and supply chain disruptions that could deepen consumption weakness.

Takeaway: Romania’s retail sales contraction underscores the challenges of balancing inflation control with growth support. Vigilant policy calibration and external risk management will be crucial in 2026.

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

Updated 12/5/25