Czech retail sales grew at their fastest rate in nearly three years in November 2013 adding to signs the economy is heading to a recovery after a record-long slump. Retail sales increased 6.1% y/y in the 11^th month of 2013, the strongest growth since Jan 2011 helped by a robust expansion of auto sales, data from the statistics office showed. The reading was well above market expectations for a 1.3% y/y rise.

On a working day adjusted basis, retail sales in November increased by 7.8% y/y and when adjusted for seasonal factors they went up 3.6% m/m. November 2013 had one working day less than in the same month last year.

Auto sales increased for the eighth straight month in November and also registered their fastest annual growth since Jan 2011. Sales and repairs of motor vehicles grew by 13.2% y/y in November, after climbing 2.2% a month earlier. Retail sales, including automotive fuel, also increased but at the much weaker pace of 3.3%, erasing a 1.8% drop in October.

IntelliNews comment: The strong growth in November retail sales indicates a recovering consumer confidence as the economy emerges from a protracted recession. Refined data on Jan 9 showed the Czech GDP rising for the second straight quarter in Q3. Real wages that grew for the first time in three quarters in Q3 also support a growth in retail sales. 

The rise in sales could also be attributed to the fact that consumers rushed to shop before prices rose as a result of the central bank’s decision to launch in November the first in more than a decade currency interventions to weaken the koruna.