Polish retail sales grew 4.4% year on year in constant prices in May (chart), a marked slowdown from the 7.6% y/y increase recorded in April, the statistics office GUS said on June 24.

The result beat the consensus, which expected a gain of 4.3% y/y. That points to consumption – a long-standing pillar of Poland’s economic growth – remaining in robust condition, analysts say.

“Sales continued to trend upward in durable goods categories [in May]. Strong double-digit growth was again recorded in furniture, consumer electronics and home appliances as well as in motor vehicles, motorcycles and parts,” ING said in a note.

“While April data left room for speculation that consumers might have been frontloading purchases in anticipation of price hikes driven by trade tensions, May’s figures suggest it is increasingly likely that Polish households are simply regaining confidence in making larger purchases,” ING also said.

Consumption is expected to be an important driver of Poland’s economic growth in 2025 once again. The Polish economy is projected to expand some 3%-4% in 2025, provided the impact of the US-led global trade war is not too severe.

Seven out of eight main retail segments expanded on an annual basis in May, GUS data showed.

Sales of food, beverages and tobacco grew 1.5% y/y in May, decelerating from 9.7% y/y the preceding month. Fuel sales increased 4.9% y/y in May, building on April’s 1.6% y/y gain.

Sales of cars and car parts rose 15.7% y/y in May, up from 14.9% y/y in April. In the pharmaceuticals and cosmetics segment, sales increased 6% y/y, slightly below April’s 7.5% y/y growth.

Textiles, clothing and footwear sales grew 4.7% y/y in May, slowing from 8.4% y/y in April, while sales of furniture, audio and video equipment and household appliances surged 18.9% y/y, significantly above April’s 13.2% y/y pace.

Sales in the press and books in the specialised stores category rose 3.5% y/y in May, slightly below the 3.9% y/y increase seen the preceding month.

Only in the broader “other” category did sales decline again, falling 10.8% y/y in May after a 6% y/y drop in April.

On a monthly basis, retail sales in constant prices fell 3.2% m/m in May, reversing the 6.2% m/m gain recorded in April, GUS data also showed.

In current prices, retail turnover added 4.3% y/y in May, also below the 7.9% y/y increase the month before. Month on month, turnover fell 3.5% m/m in May, compared to a 6.2% m/m increase in April.

Seasonally adjusted data showed retail turnover grow 2.9% y/y in May, down from 6.4% y/y in April, while falling 2% m/m in May after a 3.5% m/m increase the preceding month, GUS said.

As May retail sales were solid in contrast to other high-frequency macroeconomic indicators and with inflation clearly in a downward trend, the National Bank of Poland could decide on a second interest rate reduction this year in July.

The NBP cut its reference interest rate by 50bp to 5.25% in May. Some analysts expect more easing in the fall and winter that might bring the central bank’s interest rate to around 4.5% by the end of 2025.