Slovak retail sales expanded 5.6% y/y in February, data released by the statistics office on April 4 showed.
The result extends a trend of recovery in retail turnover that has run since November, even it was slower than the 7.4% gain recorded in the first month of 2017. The sector rebounded in November after several months of poor readings.
Retail sales growth was capped below 2% in the second and third quarters of 2016. That cast doubt over the strength of household consumption, which was left to do most of the heavy lifting last year in a Visegrad region struggling for investment and consistent industrial output.
The continued recovery in February extends hope that, driven by a tightening labour market, consumption can remain a prop for the economy this year. However, turnover is still struggling for momentum. On a monthly basis, retail sales growth dropped 0.4pp, the same as in January.
The stuttering form of retail sales saw growth across 2016 limited to 2.2%. Still, that was faster than the 1.7% recorded in 2015, which was a sharp slowdown from 3.6% in 2014.
However, the Slovak economy still managed to top the Visgrad region for GDP growth last year, with the economy expanding 3.3%. That was thanks to a better performance in investment than in peers, but Bratislava still needs to move quickly to get the inflow of EU structural funds up to speed again this year.
The rise in annual retail sales growth was driven by almost all sectors. Internet sales persisted in showing the quickest gain at 25.5%, while fuel sales – reflecting the recent rise in global oil prices - grew 16.1%.
Casting doubt on the strength of consumer confidence, turnover decreased only in sales of recreational and cultural goods by 3.9%, a main target of discretionary spending.
Across the first two months of the year, retail sales growth pushed to 6.5%.