End of the year came with disappointing consumer spending figures

Retail sales, the main indicator that measures the consumer spending trend, fell by 7.2% in December last year against the same period of 2009, with the biggest decline being recorded by non-food products, show data of the National Statistics Institute (INS).
The last month of the year, which traditionally boasted higher consumption, came with a more significant decline than in preceding months. For the full 2010, retailers' working day and seasonally adjusted turnover fell by 5.5%.
"These are disappointing figures, retail sales fell from one month to the next starting in October, after a slight recovery was recorded in the summer. This can only be as a result of the VAT increase and of the salary cuts, which amounted to a decline in the disposable income," comments Ionuţ Dumitru, chief economist of Raiffeisen Bank. He says in light of the latest data the economy is likely to have contracted in the fourth quarter against the previous one, although everybody was expecting growth.
"We can only hope that this year will be better. We expect a 1% rise in consumption, which is not much," Dumitru adds.