Czech retail sales rebounded in April 2013 ending five months of declines in a sign that consumer confidence is starting to recover. Retail sales increased by 1.5% in unadjusted terms in April, following a revised 3.5% decline in the previous month. Analysts polled by Bloomberg were expecting sales to drop by 0.3% y/y.
The reading was boosted by higher sales in the automotive sector and of non-food goods, while food sales declined. The higher number of working days also played a role. On a working day adjusted basis, retail sales in the fourth month of 2013 edged down by 0.2% on the year, while when adjusted for seasonal factors they decreased by 1.6% m/m.
After falling for five straight months, sales and repairs of motor vehicles rose by 5.7% in April, registering the strongest annual growth in nearly 1.5 years. Seasonally-adjusted auto sales went up by 1.4% m/m, following a 0.7% m/m hike in March.
Retail sales, including automotive fuel, went down by 0.3% y/y in non-adjusted terms and by 1.4% y/y in working day adjusted terms. Seasonally-adjusted sales were 3.2% lower on the month in April.
IntelliNews comment: The rebound in Czech retail sales in April is an encouraging sign that the economy that has contracted for six straight quarters in its longest-ever recession may be heading towards stabilisation. According to final Q1 GDP data released by the statistics office on June 4, household demand which used to be the main drag on growth in 2012 stopped sliding and increased by 1.6% from Q4. Yet, the growth in retail sales will be restrained by falling real wages. In Q1 real wages in the country fell by 2.2% y/y, following a 0.7% rise in the fourth quarter of 2012.
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