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UPDATE 1 - Romania's retail sales growth slows to 9.3% y/y in Nov

UPDATE 1 - Romania's retail sales growth slows to 9.3% y/y in Nov hxdbzxy/

BUCHAREST (Romania), January 6 (SeeNews) - Romania's retail sales rose by 9.3% year-on-year in November, after posting 10% annual growth the month before, seasonally and working-day adjusted data from the country’s statistics office showed on Friday.

On a monthly basis, retail trade turnover was up 1.4% in November, after growing by 0.5% in October, the data indicated.

In the eleven months through November, retail sales climbed by an annual 14.3%.

Details follow, seasonally and working-day adjusted data (pct change):

  Nov y/y Oct y/y Nov m/m Oct m/m
Retail sales 9.3% 10.0% 1.4% 0.5%
-food sales 6.8% 7.2% 0.8% 0.4%
-non-food sales 13.9% 15.0% 3.6% 3.2%
-fuels 3.9% 3.2% 2.6% -5.9%

The figures do not include trade in motor vehicles and motorcycles.

In 2015, Romania's retail sales rose by 8.9%.

Commenting on the figures, ING Bank analysts said that after the soft patch in the third quarter of 2016, retail sales made quite a big comeback in the fourth quarter, suggesting upside risks to their 4.1%/GDP growth call for 2017.

"Overall, given improved consumer confidence, still hefty wage growth and a recovery in appetite for spending, private consumption could jump back up in the fourth quarter of 2016 after weighing quite a lot on growth in the third quarter," ING analysts said in a daily comment.

This supports the analysts' expectations that GDP growth will accelerate to 1.0% quarter-on-quarter and 4.8% on the year in the fourth quarter of 2016 from 0.6% quarter-on-quarter and 4.4% year-on-year previously.

"A surprise in either direction would greatly impact our 2017 growth estimate of 4.1% due to carry-over effects, but given the above-mentioned retail data, the risk balance does seem skewed to the upside. Also adding a pinch of optimism is the fact that the government greatly accelerated capex spending in late-2016, offering some potential for upside that should carry through to 1H17," the analysts concluded.

For their part, Banca Transilvania analysts said that retail sales were largely driven by high levels of consumer confidence, supported by improving real disposable income of the population, accelerating lending in RON and promotional offers period before the holidays.

"For the coming quarters we expect a deceleration in the annual growth of retail, amid prospects for amending the mix of economic policies (which will result in an increase in financing costs), and amid the strengthening of  the savings rate around historical peaks," Banca Transilvania analysts commented in a MacroFocus report.

Raiffeisen Bank analysts noted that the main driver was the advance recorded by sales of non-food products."We expect retail sales to have remained on an upward trend in December, resulting in a solid increase in the fourth quarter. The annual growth rate decelerated further, but it remains enough elevated," they concluded.