Polish retail sales grew 7.9% y/y at constant prices in March, statistics office GUS announced on April 20.
The reading surprised, beating consensus that assumed a still very solid expansion of 6.5%. The result is also 2.7pp faster than that recorded in February.
Strong growth in the third month of the year shows that consumption, pushed by the tightening labour market, continues to be a major driver of economic growth at the start of the year. That said, results released the same day suggest industry and investment are also gaining greater traction.
The data suggests the economy expanded at a swift pace in the first quarter of the year. Polish GDP growth dropped to 2.8% in 2016.
Retail sales grew 7.1% y/y in constant prices and 9% in current prices in the first quarter. In monthly terms, retail sales grew 16.5% in March.
Sales grew in all retail segments on an annual basis at constant prices. The quickest gain came in the textiles, clothing, and shoes segment, where sales expanded 26.9%. Sales of furniture and home appliances expanded 17.7%, while sales growth in the automotive, fuels, and pharmaceuticals segments exceeded 10% as well. The only segment to experience a decline in sales in March was food, drinks, and tobacco, with a fall of 3.4%.
“Consumption growth is fuelled by growing real incomes owing to rising wages, social transfers from the government, and improving consumer confidence because of falling unemployment,” Bank Millennium sums up.
“The trend is going to continue in the coming months and consumption will remain the main driver of economic growth, although growth in retail sales may slow down in the second half of the year due to base effects,” the bank predicts.