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Wednesday, November 7, 2007

Romania Retail Sales September 2007

Romanian retail sales surged in September as higher wages, a boom in consumer credit and an expanding retail network encouraged Romanians to shop more.

Sales increased an annual 32.5 percent, slightly below the 33.7 percent growth registered in August, INSSE (the National Statistics Institute) reported this week. Month on month, sales fell 7.2 percent from August, a traditional peak shopping period.

Sales of food, drinks and tobacco surged an annual 64 percent while sales of non-food products increased 5.1 percent from September of last year. Sales in the services industry rose an annual 5.7 percent.

Consumption has risen sharply since Romania joined the European Union on Jan. 1 driven by inward remittances flows, booming credit and steadily rising wages. Average net wages rose an annual 21 percent in September.

Private debt by individuals in Romania rose an annual 53 percent in September, much of it from consumer loans, as higher wages increased borrowing power.

Romanian new-car sales will be 18 percent higher this year than in 2006, according to Ziarul Financiar.

Rising wages and expanding credit will also help to boost car sales, which will total about 350,000 vehicles this year.

``It's hard to find any good stories about Romania these days,'' Lars Christensen, senior emerging-market strategist at Danske Bank A/S in Copenhagen, is reported as saying. The leu's ``overvaluation is quite significant when compared with other central European countries'' and ``interest rates are quite low,'' he said.

Romania's central bank raised its benchmark interest rate 50 basis points on Oct. 31, matching Hungary in having the highest rates in the EU at 7.5 percent.

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