Hungarian retail sales growth accelerated to 3.6% y/y in March, and 5.6% when adjusted for calendar effects, statistics office KSH reported on May 4. The reading came well above expectations as the base figure was relatively high due to the Easter holidays in March 2016.
Analysts continue to forecast marked retail sales growth in the coming months, supported by robust real wage growth, which is likely to sit around 10% in the first quarter, boosting consumer confidence. Hungary's adjusted retail turnover expansion slumped in February to just 0.9% y/y after rising 3.8% in January. Across the first quarter retail sales grew 3.4%.
Food sales rose 3.8% higher on an annual basis in March, while non-food retail shops registered 8.2% growth, up from 3.3% in February. Fuel sales gained 2.4% compared with a 0.7% rise in the previous month.
Retail sales growth is expected to continue to pick up in the coming months due the ongoing rise in real wages, commented Takarekbank analyst Gergely Suppan. The higher purchasing power of households will lift spending in tourism, catering and services as well, he added. Takarekbank projects full-year retail sales growth of 4.5-5% after a 5% increase in 2016.
Retail turnover has now been on an upward trend for 45 consecutive months, the Economy Ministry noted in a statement. New home constructions will push up demand for related products and demand for durable consumer goods will also rise, it added.