Retail sales growth in Hungary slowed to an annualised 3.0% in September (link), from 3.3% in the previous month, a sign that Hungarian households continued to adapt to higher inflation and rising energy bills, the Central Statistics Office (KSH) announced on November 8. Adjusted for calendar year effects, retail sales growth picked up to 3.0% from 2.4% during August.
The September increase in retail sales was almost entirely due to the strong demand for fuel similar to the past four months, as food sales have been falling since June as food inflation rocketed over 30%.
Fuel sales are capped at HUF480 (€1.2) per litre, while food sales fell for the fourth straight month as food inflation remains one of the highest in Europe.
KSH data showed that adjusted food sales fell 2.8% in September, non-food sales were up 2.7%, and fuel sales grew 18.6%.
In absolute terms, retail sales came to HUF1.45 trillion. Food sales accounted for 46% of the total, non-food sales for 36% and fuel sales for 18%.
Double-digit wage growth and pre-election transfers lifted retail sales in the first half. Between February and May, annual growth was between 10-16%, but spending has slowed every month since April as inflation continued to trek upwards.
Analysts are expecting headline inflation to accelerate from a 26-year high of 20.1% in September to 21% when KSH releases the data on Wednesday. Annual food inflation is seen rising from 35% in September to 38%.
A detailed breakdown of the data shows that adjusted sales of second-hand shops climbed 21.2% and sales at clothing and footwear shops rose 14.7%. Online and mail-order sales, accounting for 7.8% of total retail sales, fell 2.4%.
Retail sales in the January-September period rose an unadjusted 7.9% and an adjusted 7.8% y/y. Growth in food sales was muted, up 0.5% y/y, while non-food sales rose 8.7% and motor fuel sales climbed 26.9%.
Annual growth for the retail sector could be 4.5%, compared to 3.5% in 2021.