Romanian retail sales July 2007

Romanian retail sales rose at the fastest annual pace this year in July because of higher wages, a stronger currency and a surge in consumer credit and construction of new stores since the country joined the European Union.

Sales increased an annual 23 percent, from a gain of 16 percent in June, the National Statistics Institute said. On a monthly basis, retail sales grew 9.2 percent after stagnating in June.

Sales of food, drinks and tobacco rose an annual 38 percent, from 24 percent in June and sales in the services industry increased 1 percent compared with a drop of 2.7 percent. Sales of non-food goods rose 9.1 percent, from 8.3 percent in June.

Consumption rose as higher investment since Romania joined the EU on Jan. 1 strengthened the currency and boosted wages. Average net wages rose an annual 24 percent in July. The leu is up 22 percent against the dollar and 15 percent against the euro in the past year, encouraging Romanians to buy more imports.

Romanians have also borrowed more to buy consumer goods and homes, pushing up private debt an annual 46 percent in July.

Retailers including Auchan SA, Carrefour SA, IKEA, Metro AG, Praktiker AG and others have announced expansions since Romania joined the EU. Bucharest-based Altex Impex SRL, Romania's biggest household-appliances retailer, said in August it will boost staff by almost 20 percent this year and open seven new stores to further take advantage of surging retail sales.