Polish retail sales grew 5.5% y/y in constant prices in April, gaining on the somewhat feeble expansion of 3% recorded the previous month, data from statistics office GUS showed on May 19.
The stronger reading in comparison to March restores hopes that the disappointing macro-economic data recorded so far in 2016 - industrial production has also been subdued, while GDP dropped 0.1% q/q in the first three months of the year - is a temporary blip. However, in monthly terms, retail sales still fell 0.3%, while in current prices growth pushed to no more than 3.2% y/y and 0.3% m/m.
Still, the stronger growth in April further testifies to forecasts that private consumption can remain a major pillar of robust economic growth, as it was in 2015. That outlook is supported by a tightening labour market and the government’s child benefit programme, which launched last month.
Sales grew in most retail segments on an annual basis. The fastest growth came in the textiles and shoes, where sales expanded 22.6%. Solid growth was also recorded in the automotive segment, which grew 19.1%; the furniture and domestic appliances segment, which increased 15.2%; and in pharmaceuticals, which posted growth of 13%. Sales of food increased 4.1%. Fuel sales dipped 5.1%, in keeping with the recent trend, driven by low global oil prices.
While the data trend appears erratic still this year, April's reading has analysts back in upbeat mood. “The strength of Polish activity data for April confirms our suspicion that the weakness seen in the first quarter was likely to prove temporary. Indeed, it looks like the economy expanded by around 3.5% y/y at the start of the second quarter," Capital Economics writes. Should that be confirmed, it would be a clear improvement on the 3% y/y GDP growth seen in the first quarter.