Polish retail sales grew 7.4% y/y at constant prices in November, statistics office GUS announced on December 19.

The reading marks a rebound on the disappointing 4.6% expansion recorded in October. The result, alongside a similar recovery in industrial output reported the same day, suggests that while still likely fragile, GDP growth will not prove as weak as feared in the fourth quarter. 

The Polish economy expanded at a disappointing 2.5% y/y in July-September, with investment, industry and consumption all disappointing to varying degrees. Results in October only added to the pessimism. However, with industrial production growing 3.3% y/y in November, the outlook for GDP expansion in the fourth quarter has improved somewhat.
 
In monthly terms, retail sales fell 3.4%, after growing 3% in October. At current prices, growth pushed to 6.6% y/y and fell 3.3% m/m.

Sales grew in most retail segments on an annual basis at constant prices. The quickest gain came in the textiles, clothing, and shoes segment, which grew 16% on the year. That was followed by the 13% increase in sales of food, drinks, and tobacco products. Fuel sales expanded 7.5%.

Sales fell in the “other retail sales in the non-specialised stores” segment, where they decreased 2.7%, as well as in the “other” segment, with sales dropping 0.6%.

Analysts, who saw October’s reading as a surprise to the downside, now talk about sales surprising to the upside.

“Consumption slowing down in October was temporary. Improvement on the labour market, as well as child benefits, support the growth of consumption. It also seems the coming Christmas season has encouraged spending,” Bank Millennium writes. “Perspectives for consumption remain positive and it will remain a main driver of economy in the coming quarters."