Slovak retail sales rose 1.9% y/y in August, bouncing back from July’s fall of 0.6%, which was the first annual decline in 15 months, data from the statistics office showed on October 5.
The return to expansion is good news for an economy that is heavily reliant on consumption for growth in the medium term. Retail sales growth has lacked vigour throughout 2016, despite labour market improvements and low inflation. The latest statistics show turnover increased by just 1.8% in the first eight months of the year.
Growth in August was driven in the first place by a 10% increase in sales of food, beverages and tobacco in specialised stores and a 6.4% rise in sales of other household equipment in specialised stores. Turnover in automotive fuels in specialised stores and non-specialised stores grew 3.3 % and 2.1 %, respectively.
Sales of information and communication equipment, however, decreased 7.8%, albeit a much slower drop than July’s 18%. Car sales leapt 30.0%, although they are not included in the headline figure.
Slovak retail sales gained 1.7% last year, slowing from 3.6% in 2014. The country’s economy grew by 3.6% in 2015, driven by domestic demand, which was mostly due to investment pushed by EU fund absorption.
Consumer confidence is, however, on the rise. The indicator edged up 4 points to reach -5.1 in September.