Hungarian retail sales growth continues recovery in March

Hungarian retail sales growth continues recovery in March
By bne IntelliNews May 4, 2016

Hungary’s retail sales growth slowed slightly in March to 4.2% y/y, according to an initial estimate released by statistics office KSH on May 4.

The reading is well below the robust 6.6% expansion in February. However, in spite of the slowdown, shop turnover remains solid and has extended its recovery following a sharp slowdown in January. Retail sales in Hungary have been increasing since July 2013 on the back of rising a tightening labour market and resultant consumer confidence, and remain a vital driver for the economy.

On an unadjusted basis, retail sales in March grew 5.5% versus 6.7% in February. In specialized and non-specialized food shops, the volume of sales adjusted for calendar effects rose by 1.9%. Turnover increased 7.6% in non-food retail trade and 5% in automotive fuel retailing.

The result leaves retail sales 4.3% higher on an annual basis across the first quarter. The figures will only stoke hope that household consumption can continue to support economic expansion as investment and demand for exports reamins subdued this year.

"Consumption, fuelled by net real wage growth, [has boosted] the economy and it may remain one of the main components of GDP growth in the following quarters as well," KBC analysts note. "[T]he relative level of household consumption is still well below the equilibrium level compared to the real income."

Retail sales are being closely watched across Central Europe due to consumption's major role in economic growth over the medium term. Analysts forecast that rising employment, income tax reduction, net real wage growth - which came at 5.9% y/y in February - and low inflation will provide a strong base for household consumption in Hungary this year. 

Meanwhile, some suggest strong domestic consumption could help rekindle inflation in the coming months. At KBC they suggest continued consumption growth could help promote a slightly more hawkish attitude at the Magyar Nemzeti Bank (MNB). "The Monetary Council may moderate the base rate by ‘just’ 15bp in May, which might be followed by maximum one more cut in June," they forecast.

Data

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss