Businesspeople: Consumption decline will range between 10 and 15%

Market players have mixed opinions as to the effects of public sector employees’ salary cuts on the economy. For many the consumption decline will be somewhere between 10 and 15%. Some say this fall will be more dramatic than last year’s, when the private sector underwent an adjustment.

Alin Ursu, manager of Angelli Spumante & Aperitive, believes the measures announced by the Government will lead to a major consumption decline after they are enforced. “Consumption will fall by at least 15%, and expensive products will be the most affected. The impact will be deeper compared with last year’s redundancies in the private sector because private sector employees turned to other professions and found new jobs,” Ursu says.

“The first five months were already slow in food retail and very slow in durable goods retail, one could feel that people were scared. The implementation of austerity measures will be yet another blow dealt to Romanians’ purchasing power and I think this will deepen the market decline,” said Gunter Grieb, chief executive of discount store chain Profi, with 140 million euros in turnover in 2009.