Hungary’s retail sales growth slowed in October to 2.6% y/y according to raw data and to 3.2% adjusted for calendar effects, a report released by statistics office KSH on February 3 shows.
The reading undershoots market expectations, and represents the second lowest result seen in 2016, as it slumped from 4.7% in November. The slowdown, however, is likely to be only transitory. The mood amongst consumers rose significantly in January, which supports hope that strong private consumption can drive economic growth higher in 2017.
In December, in specialized and non-specialized food shops, the volume of sales adjusted for calendar effects rose 2.5%. Turnover increased 3.4% in non-food retail trade and 4.3% in automotive fuel retailing.
Throughout 2016, strong private consumption has counterbalanced the feeble performance of the industrial and construction sectors. In 2016, the volume of sales – according to calendar-adjusted data – was 4.5% higher compared to the same period in 2015.
Analysts forecast that rising employment, income tax reduction, net real wage growth - which pushed to 7.5% y/y in the first eleven months of the year - and low inflation will continue to provide a strong base for household consumption this year.