Hungary’s retail sales increased 5.1% y/y in September, according to both raw and calendar-adjusted data, statistics office KSH said on November 24. The reading confirms a preliminary estimate released earlier this month, and suggests a continued improvement in retail turnover.
While the reading remains below the hefty results seen during the spring, a recovery in August and September – together with a significant increase in consumer confidence in November – raise hopes that strong private consumption can keep GDP growth afloat. The economy stumbled in the third quarter as its expansion dropped to just 2% y/y.
In specialized and non-specialized food shops, the volume of sales adjusted for calendar effects rose 3.9%. Turnover increased 5.4% in non-food retail trade and 7.7% in automotive fuel retailing. Across the first nine months of the year, the volume of sales – according to calendar-adjusted data – was 4.9% higher compared to the same period in 2015.
Retail sales are being closely watched across Central Europe due to consumption's major role in economic growth over the medium term. Analysts in Hungary forecast that rising employment, income tax reduction, net real wage growth - which pushed to 7.6% y/y in the first nine months of the year - and low inflation will continue to provide a strong base for household consumption.