Polish retail sales grew 7.1% y/y in constant prices in October, statistics office GUS announced on November 20.
The reading marks a slowdown in the pace of growth at the onset of the fourth quarter after turnover expanded 7.5% y/y in September. The slowdown is however insignificant and affirms private consumption, fuelled by the tightening labour market, as the key driver of economic growth.
With industrial production growth also strong through the tenth month of the year, the Polish economy continues to be in rude health and on course for a GDP growth of at least 4% y/y in the fourth quarter, according to Erste. Poland’s GDP accelerated to 5% y/y in the third quarter, a recent flash estimate showed.
"The data set for October is a good starting point for the fourth quarter. Strong domestic demand and good economic conditions in our trading partners will support economic growth in Poland, although, due to fundamentals, we expect a slight deceleration in the fourth quarter compared to July-September," Bank Millennium wrote.
The bank added, however, that the retail sales and industrial production data, together with data from the labour market, will be a “source of discomfort” for those members of the Monetary Policy Council who have supported maintaining record low interest rates this and next year.
The growth in retail sales in October was broad, with all main segments experiencing expanding sales. Sales growth of food, drinks, and tobacco products slowed down to 1.8% y/y in October, while sales of fuel picked up speed to 5.6% y/y in the tenth month.
Sales of furniture and domestic appliances expanded 9.6% on the year, while retail trade in textiles, clothing, and shoes expanded 14.1% y/y in October. In monthly terms, retail sales grew 2.5% in constant prices. In current prices, retail sales grew 8% y/y and 3.3% m/m.